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20 Cards in this Set
- Front
- Back
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Absolute Advantage
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being able to produce a good more efficiently (more output per unit of input) than any competitor.
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Accelerator Principle
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Relates changes in the real output growth to the level of desired investment demand in the economy. (e.g. decline of real GDP growth causes demand of investment spending to decline)
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Aggregate Demand Curve
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Relates the level of real national income (GDP) demanded to the price level.
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Aggregate Expenditure
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[Macro Theory] Total amount of desired spending by consumers, governments, private investors, and foreign buyers (net spending on imports) at each level of real national income (GDP).
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Aggregate Supply Curve
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short run supply curve relates the total number of goods and services supplied to the price level. Long run curve is a vertical line at the full employment level of real national income.
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Automatic Stabilizer
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Government spending programs which respond to changes in the level of national income in such a way as to offset those changes. (e.g. Unemployment)
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Average Fixed Costs
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fixed cost per unit of output. (Total fixed costs divided by the number of units of output.)
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Average Revenue Product
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Total revenue divided by the number of units of the factor employed.
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Average Variable Costs
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total variable costs divided by the units of output
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Axes
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The fixed points on a graph which carry the scales against which the coordinates are plotted.
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Microeconomics
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examines the economic behavior of agents (individuals and firms)
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Macroeconomics
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addresses the issues of addresses the issues of unemployment, inflation, monetary, and fiscal policy for an entire national economy.
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Aggregate Demand
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Total demand for final goods and services in the economy at a given time.
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Opportunity Cost
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The best alternative that we forgo when we make a choice or a decision.
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Marginalism
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The process of analyzing the additional or incremental costs or benefits arising from a choice or decision.
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Efficient Market
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A market in which profit opportunities are eliminated almost instantaneously.
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Determinants of Household Demand
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Income and Wealth, Prices of other Goods and Services, Tastes and Preferences, Expectations
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Law of Demand
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The Negative relationship between price and quntity demanded: as price rises, quantity demanded decreases. As price falls, quantity demanded increases.
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elasticity
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a percentage change in quantity demanded that results from percentage change in the price of a good.
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market efficiency
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the condition in which the economy is producing what people want at least possible cost.
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