question
opportunity cost
answer
Cost of the next best alternative use of money, time, or resources when one choice is made rather than another
question
marginal decisions
answer
the decisions of what to do with the next ton of pollution, the next hour of free time, and the next dollar of spending money, ect
EXAMPLE;
An educational software company wants to expand number of economics questions that it offers and is considering hiring another economist. it compares how much adding another worker will improve the product with the additional cost.
EXAMPLE;
An educational software company wants to expand number of economics questions that it offers and is considering hiring another economist. it compares how much adding another worker will improve the product with the additional cost.
question
resource scarcity
answer
is the idea that things are finite. Because resources aren\'t unlimited, people have to make choices about how to use best use them. Someone allocating their time between eating, exercising, and watching TV is an example of resource scarcity. Here, time is the scarce resource. Note that resource scarcity and opportunity cost are closely related in that opportunity cost is a direct result of resources being scarce.
example;
Eva finds that there is not enough time after work to have dinner, exercise, and watch TV, and she must make choices about how to use her limited time.
example;
Eva finds that there is not enough time after work to have dinner, exercise, and watch TV, and she must make choices about how to use her limited time.
question
advantage
answer
Benefit
question
comparative advantage
answer
The ability of a country or firm to produce a particular good or service more efficiently than other goods or services, such that its resources are most efficiently employed in this activity. The comparison is to the efficiency of other economic activities the actor might undertake, not to the efficiency of other countries or firms.
question
true
answer
countries specialize in the production of goods for with they have a comparative advantage.
question
true
answer
it can be mutually beneficial for two nations to specialize in goods for which they have a comparative advantage and then trade with one another.
question
false
answer
absolute advantage is the source of the potential gains from specialization and trade.
question
false
answer
a nation will not have a comparative advantage in a production if t does not also have an absolute advantage in the production of that good.
question
false
answer
the process of specialization and trade has positive net benefits and is therefore beneficial to everyone.
question
statement say something about how THE WORLD OUGHT TO BE
answer
normative
question
statement say something that DESCRIBES how the world currently is
answer
positive
question
normative economics
answer
the richest 1% of americans should pay more taxes than the rest of the 99%
question
positive economics
answer
a decrease in the supply of coconut will increase the price of german chocolate cake, a good which requires coconut shavings as a key ingredient
question
positive economics
answer
the higher the minimum wage, the higher the price of goods and services is likely to be
question
normative economics
answer
social welfare spending in sweden occupies too large a portion of the national budget.
question
is not in the area of microeconomic study
answer
does hosting the Olympics decrease the unemployment rate?
question
microeconomics
answer
Study of a single factor of an economy - such as individuals, households, businesses, & industries - rather than an economy as a whole.
question
macroeconomics
answer
Concentrates on the operation of a nation's economy as a whole.
analyses the economy as a whole. For example it considers the overall numbers employed in an economy. It deals therefore with topics such as inflation, unemployment, economic growth and international trade.
analyses the economy as a whole. For example it considers the overall numbers employed in an economy. It deals therefore with topics such as inflation, unemployment, economic growth and international trade.
question
peak
answer
the height of an economic expansion, when real GDP stops rising
question
expansion
answer
in increase in size and power, A period of economic growth as measured by a rise in real GD.
question
recession
answer
A slowdown in a nation's economy
A period during which aggregate output declines. Conventionally, a period in which aggregate output declines for two consecutive quarters.
A period during which aggregate output declines. Conventionally, a period in which aggregate output declines for two consecutive quarters.
question
trough
answer
Lowest point of a wave
question
GDP
answer
Gross Domestic Product- the total market value of all final goods and services produced annually in an economy
question
business cycle peak
answer
the point at which the economy turns from expansion to recession
question
self regulating
answer
the view that in an economy problems such as unemployment would be corrected through the working of the invisible hand and that government attempts to improve the economy's performance would be ineffective at best - and would probably make things worse
question
the paradox of thrift
answer
When people decide to save more of their income, which reduces aggregate demand, which can cause recessions is called
question
long-run economic growth
answer
the process by which rising productivity increases the average standard of living
question
true
answer
long-run economic growth can be measured with per capital GDP
question
true
answer
long-run economic growth is often a result of increases in productivity
question
inflation
answer
A general and progressive increase in prices
an increase in the overall price level.
an increase in the overall price level.
question
deflation
answer
-Price level FALLS
question
price stability
answer
People want to keep prices stable and limit inflation because with high inflation, people are forced to pay more for food, clothing, supplies, etc. This is especially harmful to people on a fixed income. Sometimes high inflation can also discourage business activity - just becomes too cost
question
increase in GDP and improved standard of living
answer
increase in technology
question
increase in GDP and improved standard of living
answer
school quality increases from procurement of new equipment.
question
increases GDP but not the standard of living
answer
household unpaid work becomes formalized in GDP
question
increases GDP but not the standard of living
answer
the black market shrinks because firms shift to the formal sector but production remains the same
question
Does not increase GDP but increases standard of living
answer
workers work less, but produce same amount
question
Does not increase GDP but increases standard of living
answer
volunteers clean a river used for swimming
question
Does not increase GDP but increases standard of living
answer
income inequality decreases and people dislike inequality
question
Does not increase GDP but increases standard of living
answer
school quality increases from parental involvement.
question
GNP
answer
Gross National Product
question
winners at unexpected inflation occurs
answer
joy, who has borrowed $40,000 to pay for her college education.
question
winners at unexpected inflation occurs
answer
the u.s. federal government, which had almost $15 trillion in debt in 2011
question
losers
answer
herb, who keeps his saving in an old coffee can.
question
losers
answer
3rd national a bank that loaned many people money for home purchase
question
losers
answer
karen a retired school teacher that relies upon her fixed pension to pay for her expenses.
question
most accurately characterizes the method used to calculate inflation
answer
analysts measure the cost of a bundle of goods representative of overall spending at two points in time and compare the difference in cost.
question
definition of inflation
answer
a general and ongoing rise in the average level of prices in an economy.
question
what is indexing
answer
the process of making payments dependent upon the overall price level
question
what is a COLA?
answer
A cost of living adjustment
question
contractions
answer
recession deflation, rising, unemployment
question
income approach
answer
GDP measured by all in the economy
question
EX-export
answer
what is sell to other countries
question
IM-import
answer
what we buy from other countries
question
core inflation
answer
the rate of inflation excluding the effects of food and energy prices
question
indexing
answer
the process of making payments dependent upon the overall price level
question
shoe leather cost
answer
people do not want to hold cash
question
inflation rate
answer
(price actual- price past) % ( price past)= * 100 =
question
growth rate in gdp
answer
(14672.9 / 98.507) x 100=$ 14895.3
question
inflation power
answer
because more inflation will lead to lower buying power
question
inflation
answer
A general and progressive increase in prices
question
example of shoe leather cost
answer
due to the high inflation rate, you spend time on the computer every day transferring money from an account with higher yield that compensates you for higher inflation to your checking account that does not.
question
unit of account cost
answer
Costs of Inflation
question
example of unit of account cost
answer
whenever the price of any groceries are increased in your normal grocery store, you take time to go to the other store to see if their prices increased too, indicating that the price increase is due to inflation, or whether their prices stayed the same.
question
menu cost
answer
the costs of changing prices
question
example of Menu costs
answer
in response to unexpectedly high inflation, the manager of the restaurant has to print a new catalogue of new prices
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