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55 Cards in this Set
- Front
- Back
supply
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the amount of a material availible for use
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demand
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the quantity that the consumers would purchase at a selected price
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GDP
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Gross Domestic Product
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interest
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the amount paid to a lender for a loan
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opportunity cost
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what is lost when you choose one option over another
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Aggregate demand
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the total amount demanded of the economy
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consumption expenditure
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the amount of money spend by household consumers
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investment expenditure
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money spent on firms to invest in new technology, ect.
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government expenditure
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amount spent by government that comes from treasury
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Aggregate supply
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total amount produced at given prices
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microeconomics
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The decisions made by an individual consumer or company.
Ex. Midwest Airlines, Jiffy Lube |
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Macroeconomics
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the overall economy, decisions made by a whole industry.
Ex. Airlines, Car Repair/Maintenence |
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scarcity
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at any one time, an economy has a limited power over resources, limited output
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oppurtunity cost
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there is a limited amount of resources so when decisions are made towards one thing, the ability to make another is gone
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optimization
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people try to reach a goal or become optimized naturally
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implicit market
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individuals work together for mutual benefit
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stable preferences
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humans have certain goals and preferences that they have the urge to satisfy
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utility function
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self, or description of what is important to a person
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bounded rationality
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try not to optimize but to satisfy
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market
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economy where forces of supply and demand determine goods and prices
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command
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economy where central planning committee decide goods and prices
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mixed economy
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mix of command and market economy
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land
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any none produced item. any item not manmade used in production
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input
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the items put into production
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capital
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any previously processed item used in production
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output
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consumer goods and services produced
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law of increasing relative cost
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more of something produced, more it costs to produce it
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trade off
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give up some of one thing to get more of another
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elasticity of demand
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measure quanity demanded as the price changes
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barter system
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producer finds someone whose needs and supplies are the opposite. Person 1 has A and needs B. Person 2 has B and needs A.
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demand curve
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negative slope because relationship is inverse
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supply curve
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positive slope because of direct relationship
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equilibrium
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the amount of product produced equals amount demanded.
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shortage
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when demand is greater than amount produced
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surplus
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when amount produced is greater than demand
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substitute goods
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a similiar good bought when the original is priced too high
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complementary
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when something goes down in price and something that goes with it increase in price.
Ex. Price of tennis racket decreases but price of tennis balls increase |
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law of demand
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the amount demand will change with a change in price
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elastic change in demand
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when the change in amount demanded is greater than the change in price
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inelastic change in demand
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when the change in price is greater than change in demand
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unitaryelastic change in demand
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change in price equals change in demand
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monopoly
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only one seller with a unique product
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monopolistic competition
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many producers and sellers, but with slightly different products
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oligopoly
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few producers and sellers with differen or same products
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total revenue
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price x quantity
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marginal revenue
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additional revenue for each additional unit sold
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GNP
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Gross National Product. all goods and services produced in a year
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value added approach of finding GNP
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makes products=price-cost of product needed to produce them
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depreciation
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allowance for replacing worn out capital
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macroeconomics theory
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why economy expands and contracts
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aggregate demand curve
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inverse relationship between price and planned expenditures
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aggregate supply curve
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inverse relationship between price and real output
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recession
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when output drops below potential
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stable prices
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prices and wages remain the same
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net interest
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all interest paid. Total interest
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