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19 Cards in this Set
- Front
- Back
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scarcity principle
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w/ limited resources, having more of this means having less of that
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choosing to study til the extra benefit equals the extra cost is
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an application of the cost benefit principle
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rational decision making
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choose the actions that yield the largest total benefit
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COMPARATIVE ADVANTAGE
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doing something @ lowest oppertunity cost
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principle of increasing opportunity cost
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to expand production, start w/ the lowest oppertunity cost resource and proceed to the higher opportunity cost resources
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the __ the diff b/w domestic opportunity costs and international oppertunity costs, the ___ the potential benefits of trading w/ other countries
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greater
greater |
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characteristics of the capitalist economy
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decide for yourself which careers to pursue
companies produce what they want consumers buy whatev they want live anywhere you want |
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if living standards in a country increase, then total output must have
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increased more rapidly than population increased
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marcroeconomic issues include:
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productivity
economic growth recessions and expansions inflation NOT energy reserves |
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GDP of the US includes
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stuff that was made here
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unemployment rate =
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unemployed / # in work force
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real GDP is GDP adjusted for
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inflation
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in the long run, increases in ouptut per person arise primarily from...
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increase in avg labor productivity
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countries w/ small amounts of capital per worker tend to have __ levels of real GDP per person and ___ levels of avg labor productivity
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low
low |
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biggest problem thwarting economic growht in the poorest countries compared to the richest countries is
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legal and/or political environment unfavorable to economic growth
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real wages increased in industrialized countries in the 20th century b/c demand for labor...
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increased more rapidly than the supply of labor increasd
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2 most important factors contributing to increased productivity in the 20th century were
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technological progres and increases in capital stock
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globilization __ the wages of workers in the exporting industries and __ the wages of workers in the import-competing industries
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raises
lowers |
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introduction of new technology ___ the real interest rate and ___ the equilibrium quantity of national saving
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increases
increases |
