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69 Cards in this Set
- Front
- Back
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Labor Productivity
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The Amount of output that can be obtained per hour of labor
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Human wants
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Things, services, goods, and circumstances people desire
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Resources
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Things or services used to produce goods, which then can be used to satisfy wants
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Economic resources
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They are scarce
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Free Resources
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Air, etc. They are so abundant that they can be obtained without charge
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Economic Resource #1
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Land, natural resources, minerals, plots of groun
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Economic Resource #2
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Labor - HUman efforts, both physical and mental
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Economic Resource #3
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Capital - Buildings, equipment, inventories and other nonuman producible resources that contribute to the production, marketing and distribution of goods and services
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Fun Fact...just remember
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Economics is concerned with the way resources are allocated among alternative uses to satisfy human wants
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Technology
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Is society's pool of knowledge concerning the industrial arts.
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4 Questions of economists!
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What determines what and how much is produced?
What determines how it is produced? What determines how the society's output is distributed among the members? What determines the rate at which the society's per-capita income will grow? |
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Opportunity Cost
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The value of what these resources could have produced had they been used in the best alternative way
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Positive Economics
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Contains descriptive statements, propositions and predictions about teh world - Not judgmental!
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Normative Economics
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Makes statements about what ought to be or what a person, organization, or nation ought to do
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4 Tasks of an economic System
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1.) Determine the level and composition of society's output
2.) Determine how each good and service is to be produced 3.) Determine how the goods and services are to be distributed among the members of society |
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Labor Productivity
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The Amount of output that can be obtained per hour of labor
|
|
|
Human wants
|
Things, services, goods, and circumstances people desire
|
|
|
Resources
|
Things or services used to produce goods, which then can be used to satisfy wants
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Economic resources
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They are scarce
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Free Resources
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Air, etc. They are so abundant that they can be obtained without charge
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Economic Resource #1
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Land, natural resources, minerals, plots of groun
|
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Economic Resource #2
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Labor - HUman efforts, both physical and mental
|
|
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Economic Resource #3
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Capital - Buildings, equipment, inventories and other nonuman producible resources that contribute to the production, marketing and distribution of goods and services
|
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|
Fun Fact...just remember
|
Economics is concerned with the way resources are allocated among alternative uses to satisfy human wants
|
|
|
Technology
|
Is society's pool of knowledge concerning the industrial arts.
|
|
|
4 Questions of economists!
|
What determines what and how much is produced?
What determines how it is produced? What determines how the society's output is distributed among the members? What determines the rate at which the society's per-capita income will grow? |
|
|
Opportunity Cost
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The value of what these resources could have produced had they been used in the best alternative way
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|
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Positive Economics
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Contains descriptive statements, propositions and predictions about teh world - Not judgmental!
|
|
|
Normative Economics
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Makes statements about what ought to be or what a person, organization, or nation ought to do
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4 Tasks of an economic System
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1.) Determine the level and composition of society's output
2.) Determine how each good and service is to be produced 3.) Determine how the goods and services are to be distributed among the members of society 4.) Determine the rate of growth of per capita income |
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Production Possibility Curve
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Curve that shows the various combinations of output of two variables that a society can produce
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capital Goods
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Consist of plan and equipment used to make other goods
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Consumer goods
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Items that consumers purchase, like clothing, food and drinks
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Consumers
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Purchase the goods and services that are the end products of the economic system
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Firm
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Organization that produces a good or service for sale - want profit
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Market
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A group of firms and individuals in touch with each other to buy or sell some good good
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Grosss Domestic Product
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Value of the toal amoutn of final goods and services produced by our economy during a particular period of time
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GDP can be measured
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as the sum of all the money incom earned in a given period of time, or as the sum of all expendiatures in the economy
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Final goods and services
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goods and services destined for the ultimate user
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Base Year
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The cost of a certain good in one year is held constant and used at the same price for furture year's calculations
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Current Dollars
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Actual dollar amounts
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Constant dollars
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corrected for changes in the price level
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Real GDP
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GDP after being corrected for changes in the price level
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Price index
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The ratio of the value of a set of goods and and services in constant dollars
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Value added
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The amount of added added by a firm or industy to the total worth of the product
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Leisure does
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Not show up in GDP
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Expenditures approach
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Regards GDP as the sum of all the expenditures on the final goods and seriveces produced this year
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income approach
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regards GDP as the sum of all the incomes derived from the production of this year's total output
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Net exports
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Equal the amount spent by other countries on our goods and services less the amount we spent on other countries goods and services
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Expendtiure approach to GDP =
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Personal consumption expenditures + Gross private domestic investments + governemnt purchases of goods and serives + net exports
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Income approach GDP =
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Compenstation of employees + rents + interst + propritor's income + corpoate profits + depreciation + indirect business taxes
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Trough
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POint where national output is lowest relative to its petential level
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Expansion
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Subsequent phase during which national output rises
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Peak
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Nation output is highest relative to it's potential level
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Recession
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Subsequent phase during which national output falls
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Depression
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A period when national output is well below its potential level
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Prosperity
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A period when national output is close to its potential level
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Aggregate demand curve
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SHows the level of real national putput that demanded at each price level
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Demand curve
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Slopes downward and to the right
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Why does the damand curve slope down and to the right?
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Increaes in the prive level push up interest rates and increases in interest rates reduce total output
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Aggregate supply curve
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Shows the level of real national output supplied at each prive level
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Short-run aggregate supple
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Slopes upward and to the right - when other things are held equal the higher is the prive level, the large the total output supplied.
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According to many economists the short-run aggregate supple curve
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tends to be close to horizontal at relatively low levels of output and gets steeper and steeper as output increases
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Frictional unemployment
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Occurs because people quit jobs, because ex-students are looking for their first job, or because of seasonal workers
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Structural unemployment
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Occurs when new goods and new technologies call for different skills than old ones and workers with older skills cannot find jobs
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Cyclical unemployment
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Occurs because of business fluctuations
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POtential GDP
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Is the level of gross domestic product that could be achieved with full employment
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Full employment
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5 percent unemployment rates
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Long-run aggregate supple curve
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A verticle line
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