Micro Exam 3

Front 1

Resource = resource payment
land =
labor =
capital =
entrepreneurial ability =

Back 1

rent
wages
interest
profit

Front 2

MRP

Back 2

marginal revenue product - the additional revenue that an additional resource can create for a firm

Front 3

MFC

Back 3

marginal factor cost - the additional cost of an additional unit of a resource

Front 4

Demand for a resource will increase when:

Back 4

-price of final product rises
- productivity of the resource rises
- the number of buyers increases
- price of a substitute resource rises
- the price of a complementary resource declines
- the firm possesses high levels of other resources

Front 5

(〜を) おねがいします

Back 5

(exp.) ". . . , please." [会L2]

Front 6

price floor is above/below equilibrium?

Back 6

above

Front 7

price ceiling is above/below equilibrium?

Back 7

below

Front 8

economic profit =

Back 8

TR - TC

Front 9

MRP =

Back 9

MR * MPP

Front 10

VMP curve

Back 10

(value of the marginal product) = P * MPP

Front 11

if MRP>MFC, then...

Back 11

increase resource use

Front 12

if MRP<MFC, then...

Back 12

decrease resource use

Front 13

if MRP = MFC, then...

Back 13

optimal level of resource use

Front 14

effects of a wage increase:

Back 14

substitution effect
income effect

Front 15

reservation wage

Back 15

lowest acceptable wage offer

Front 16

differences in wages caused by differences in nonwage job characteristics:

Back 16

risk
educational requirements
stress
geographical location

Front 17

human capital is...

Back 17

a measure of an individual's productive capacity

Front 18

an individual's human capital may be increased by investments in:

Back 18

education
work experience
health care

Front 19

general human capital...

Back 19

raises productivity in more than one firm

Front 20

firm-specific human capital...

Back 20

raises productivity only in the current firm

Front 21

CEO's earn...

Back 21

more than 200 times as much as an average worker

Front 22

discrimination occurs when...

Back 22

pay or job market opportunities are tied to factors other than a worker's productivity

Front 23

discrimination due to prejudice:

Back 23

employer prejudice
worker prejudice
customer prejudice

Front 24

statistical discrimination occurs...

Back 24

if workers are judged based on the ave characteristics of the groups of which they are members;
affects women and older workers (training costs)

Front 25

anti-discrimination law

Back 25

civil rights act of 1964

Front 26

civil rights act of 1964 -

Back 26

made it illegal to discriminate on the basis of race, color, religion, sex, or national origin (except when there is a legitimate reason for such policies)

Front 27

standards of discrimination -

Back 27

disparate treatment
disparate impact

Front 28

disparate treatment occurs when...

Back 28

a policy intentionally treats individuals differently based on their sex, race, color, religion, or national origin

Front 29

disparate impact

Back 29

based on outcomes of policies, not intention of policies
stricter standard, designed to offset past discrimination

Front 30

minimum wage

Back 30

has existed in the US since 1938 ($.25/hr). in 2009, it was $7.25/hr;
Some industries are exempt from paying min wage; States can have their own min wage if exceeds fed

Front 31

impact of minimum wage

Back 31

- in market like unskilled markets, min wage creates a labor surplus as quantity of jobs offered is reduced and quantity of people wanting jobs increases
- min wage drives up wages for those who have a job, but it hurts the chances of employment for others

Front 32

outsourcing -

Back 32

the process of purchasing services from another firm rather than employing someone to do the service inside the firm

Front 33

offshoring

Back 33

when jobs are purchased from a firm in another country

Front 34

comparable worth

Back 34

"equal pay for equal work"; pay ought to be determined by the job characteristics rather than by supply and demand; proponents say the markets inability to assess marginal products makes market wages unacceptable; opponents argue that interference will lead to shortages in some occupations and excess supplies in others

Front 35

Gini coefficient

Back 35

measure of income inequality ranging between 0 and 1; 0 means all families have same income; 1 means that one family has all of the income; it is the area between the Lorenz curve and line of perfect equality divided by the total area under the area under the line of income equality

Front 36

poverty levels

Back 36

US est formal income poverty cutoff levels; does this by figuring cost of food (1/3 of income) then multiplied by 3; poverty thresholds count earnings from cash transfers, but NOT in-kind transfers

Front 37

measuring poverty

Back 37

census data overstate inequality because of what they do and do not measure:
-census figures are for before-tax income
-census data do not account for differences in the number of persons in a family/household

Front 38

better way of measuring poverty is...

Back 38

measuring how much people consume, not their income

Front 39

factors affecting poverty

Back 39

- major factor is the health of the economy
- the '74 recession caused unemployment to reach 7,929,000
- '82 caused 10.7 million unemployment
-'91 highest poverty level in 3 decades (14.2%)

Front 40

who are the poor?

Back 40

- 25% of americans fall below the poverty line at some time in their lives
- of these, many are short; about 45% last less than a year
- more than 50% of those in poverty remain there for at least 10 years

Front 41

causes of poverty

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- no or little income due to unemployment
- less education, the greater chace of poverty

Front 42

government antipoverty policy

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- tax policy
- welfare programs

Front 43

tax policy

Back 43

- progressive tax
- proportional tax
- regressive tax

Front 44

welfare programs

Back 44

- Supplemental Security Income (SSI) rands first among cash welfare programs
- 65% of the SSI pop is blind or disabled, the rest are over 65
- SSI recipients must meet disability req or be of a certain age and must have incomes below $4500/year

Front 45

in-kind transfers

Back 45

about 60% of all poor households receive in-kind transfers
- Medicaid is largest
- food stamps 2nd largest
- welfare programs cost more than $700 billion annually

Front 46

income distribution among nations

Back 46

- 80% of the world's pop lives below what countries in north america and europe consider to be the poverty line
- poorest 10% of americans are better off than 2/3 of the world's population

Front 47

calculating NIT

Back 47

income floor - annual income * tax rate

when = 0 it is called break even point

Front 48

65+ counts for what percentage of the population?

Back 48

13%; about 1 in every 8 americans

Front 49

in '09, how much larger was the 65-74 age group than in '90? the 75-84 age group? the 85+ group?

Back 49

8 times; 12 times; 22 times

Front 50

median age in 1850 and now is...

Back 50

18.9; now it is approaching 40

Front 51

OASDI

Back 51

Old-Age, Survivors, and Disability Insurance

Front 52

social security and medicare are financed by...

Back 52

payroll tax charged by FICA equally to employer and employee

Front 53

FICA

Back 53

Federal Insurance Corporation of America

Front 54

what was the FICA tax rate in '09 and '10 for social security and medicare?

Back 54

6.2% on first $106,800; 1.45% on all earning

Front 55

Social security tax currently is what percentage of personal income?

Back 55

over 11%

Front 56

Social security tax money is used to...

Back 56

used to purchase gov bonds to pay for general government expenditures
- amount paid by the individual is far less than amt received in retirement benefits

Front 57

alternatives to address concerns about social security

Back 57

- increase taxes
- increasing eligibility age; raised from 59 to 67
- not paying SS to anyone earning above a certain level of income
- holding down cost-of-living increases

Front 58

privatization

Back 58

allows individuals to chose among an approved list of possible investments rather than giving money to the gov
- whatever the indiv earns on those investments would be the individuals retirement funds

Front 59

government spending on healthcare constitutes for what percentage of the total spending?

Back 59

45%

Front 60

medicare

Back 60

fed healthcare prog for elderly and disabled

Front 61

medicaid

Back 61

is a joint fed-state prog that pays for healthcare for poor families, neediest elderly, and disabled persons

Front 62

the financing mechanism -

Back 62

for demand to increase, the aged must both be willing to buy medical care and able to pay for it; medicare and medicaid gave many elderly the ability

Front 63

3 largest resources in the medical industry are...

Back 63

hospitals, physicians, and nursing homes

Front 64

absolute advantage

Back 64

the ability of a party (an individual, or firm, or country) to produce more of a good or service than competitors, using the same amount of resources

Front 65

the slop of an indifference curve indicates...

Back 65

Marginal Rate of Substitution of x for y

Front 66

production functions shows...

Back 66

relationship between output and input

Front 67

badebukse (en, -r)

Back 67

swimming trunks

Front 68

equation to find the limits on the terms of trade

Back 68

divide x by y for each country and the answer is between the 2 country's answers

Front 69

import is on what line?

Back 69

demand

Front 70

export is on what line?

Back 70

supply

Front 71

international equilibrium price equation

Back 71

where Qs = Qd

Front 72

Adam Smith said...

Back 72

economic growth is caused by increased specialization and division of labor

Front 73

absolute advantage

Back 73

an individual (or country) is more productive than other individuals (or countries)

Front 74

comparative advantage

Back 74

an individual (or country) may produce a good at a lower opportunity cost than can other individuals (or countries)

Front 75

"learning by doing"

Back 75

increase in productivity from task repetition