Macroeconomics Ch. 2 & Ch. 3 - Assignment Essays

question

Budget constraint

answer

the limited amount of income available to consumers to spend on goods and services

question

Opportunity set

answer

all possible combinations of consumption that someone can afford given the prices of goods and the individual's income

question

Budget

answer

a plan for making and spending money and is a prediction for the future. And there may be unforeseen issues that will make it difficult to follow your plan

question

Fiscal

answer

12 month time period

question

Deficit budget

answer

income is less than expenses

question

Balanced budget

answer

income is equal to expenses

question

Surplus budget

answer

income is greater than expenses

question

Marginal analysis

answer

examining the benefits and costs of choosing a little more or a little less of a good.

question

Utility

answer

satisfaction, usefulness, or value one obtains from consuming goods and services

question

Law of diminishing marginal utility

answer

as a person receives more of a good, the additional utility from each additional unit of the good declines

question

Sunk costs

answer

costs that were incurred in the past and cannot be recovered (car insurance if you never get in an accident)

question

Production Possibilities Frontier (PPF)

answer

a diagram that shows the productivity efficient combinations of two products that an economy can produce given the resources it has available.

question

Law of diminishing returns

answer

in a production process, as one input variable is increased, there will be a point at which the marginal per unit output will start to decrease, holding all other factors constant. (farmer with fertilizer example)

question

Productive efficiency

answer

a situation in which a good or service is produced at the lowest possible cost

question

Allocative efficiency

answer

when the mix of goods produced represents the mix that society most desires

question

Absolute advantage

answer

a person, country, or company is best at making something. Produces more product in a given amount of time than anyone else (the ability to produce a good using fewer inputs than another producer)

question

Comparative advantage

answer

the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors

question

Positive statements

answer

Factual statements that describe the world as it is

question

Normative statements

answer

describe how the world should be. These statements are subjective questions of opinion.

question

Demand

answer

the amount of some good or service consumers are willing and able to purchase at each price.

question

Price

answer

what a buyer pays for a unit of the specific good or service

question

Quantity demanded

answer

the total number of units of a good or service consumers are willing to purchase at a given price

question

Law of demand

answer

keeping all other variables that affect demand constant, if the price goes up then the quantity we demand goes down. If the price goes down, then the quantity that we demand goes up.

question

independent variable

answer

variable that is manipulated (price)

question

dependent variable

answer

variable that is being studied (quantity)

question

demand schedule

answer

a table that shows a range of prices for a certain good or service and the quantity demanded at each price

question

demand curve

answer

a graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis.

question

Supply

answer

the amount of some good or service a producer is willing to supply at each price

question

quantity supplied

answer

the total number of units of a good or service producers are willing to sell at a given price

question

Law of supply

answer

assuming all other variables that affect supply are held constant; if price goes up then supply goes up. If price goes down, then supply goes down.

question

Supply schedule

answer

a table that shows the quantity supplied at a range of different prices

question

Supply curve

answer

a graphic illustration of the relationship between price to sell something at, shown on the vertical axis, and quantity, shown on the horizontal axis.

question

Equilibrium

answer

the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change. quantity demanded = quantity supplied

question

Equilibrium price

answer

the price where the quantity demanded is equal to the quantity supplied

question

Equilibrium quantity

answer

the quantity at which quantity demanded and quantity supplied are equal for a certain price level.

question

Surplus or excess supply

answer

at the existing price, quantity supplied exceeds the quantity demanded.

question

Shortage or excess demand

answer

at the existing price, the quantity demanded exceeds the quantity supplied.

question

Invisible Hand

answer

term economists use to describe the self-regulating nature of the marketplace

question

Normal good

answer

a product whose demand rises when income rises, and vice versa.

question

Inferior good

answer

a product whose demand falls when income rises, and vice versa. (Ms. Knoll's mac and cheese example: now that she has more money, she doesn't buy mac and cheese in a box)

question

Shift in supply

answer

when a change in some economic factor (other than price) causes a different quantity to be supplied at every price.

question

Inputs or factors of production

answer

the combination of labor, materials, and machinery that is used to produce goods and services.

question

Factors that affect supply

answer

Natural conditions, input prices, technology, and government policies

1 of 43

question

Budget constraint

answer

the limited amount of income available to consumers to spend on goods and services

question

Opportunity set

answer

all possible combinations of consumption that someone can afford given the prices of goods and the individual's income

question

Budget

answer

a plan for making and spending money and is a prediction for the future. And there may be unforeseen issues that will make it difficult to follow your plan

question

Fiscal

answer

12 month time period

question

Deficit budget

answer

income is less than expenses

question

Balanced budget

answer

income is equal to expenses

question

Surplus budget

answer

income is greater than expenses

question

Marginal analysis

answer

examining the benefits and costs of choosing a little more or a little less of a good.

question

Utility

answer

satisfaction, usefulness, or value one obtains from consuming goods and services

question

Law of diminishing marginal utility

answer

as a person receives more of a good, the additional utility from each additional unit of the good declines

question

Sunk costs

answer

costs that were incurred in the past and cannot be recovered (car insurance if you never get in an accident)

question

Production Possibilities Frontier (PPF)

answer

a diagram that shows the productivity efficient combinations of two products that an economy can produce given the resources it has available.

question

Law of diminishing returns

answer

question

Productive efficiency

answer

a situation in which a good or service is produced at the lowest possible cost

question

Allocative efficiency

answer

when the mix of goods produced represents the mix that society most desires

question

Absolute advantage

answer

a person, country, or company is best at making something. Produces more product in a given amount of time than anyone else (the ability to produce a good using fewer inputs than another producer)

question

Comparative advantage

answer

the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors

question

Positive statements

answer

Factual statements that describe the world as it is

question

Normative statements

answer

describe how the world should be. These statements are subjective questions of opinion.

question

Demand

answer

the amount of some good or service consumers are willing and able to purchase at each price.

question

Price

answer

what a buyer pays for a unit of the specific good or service

question

Quantity demanded

answer

the total number of units of a good or service consumers are willing to purchase at a given price

question

Law of demand

answer

keeping all other variables that affect demand constant, if the price goes up then the quantity we demand goes down. If the price goes down, then the quantity that we demand goes up.

question

independent variable

answer

variable that is manipulated (price)

question

dependent variable

answer

variable that is being studied (quantity)

question

demand schedule

answer

a table that shows a range of prices for a certain good or service and the quantity demanded at each price

question

demand curve

answer

a graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis.

question

Supply

answer

the amount of some good or service a producer is willing to supply at each price

question

quantity supplied

answer

the total number of units of a good or service producers are willing to sell at a given price

question

Law of supply

answer

assuming all other variables that affect supply are held constant; if price goes up then supply goes up. If price goes down, then supply goes down.

question

Supply schedule

answer

a table that shows the quantity supplied at a range of different prices

question

Supply curve

answer

a graphic illustration of the relationship between price to sell something at, shown on the vertical axis, and quantity, shown on the horizontal axis.

question

Equilibrium

answer

the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change. quantity demanded = quantity supplied

question

Equilibrium price

answer

the price where the quantity demanded is equal to the quantity supplied

question

Equilibrium quantity

answer

the quantity at which quantity demanded and quantity supplied are equal for a certain price level.

question

Surplus or excess supply

answer

at the existing price, quantity supplied exceeds the quantity demanded.

question

Shortage or excess demand

answer

at the existing price, the quantity demanded exceeds the quantity supplied.

question

Invisible Hand

answer

term economists use to describe the self-regulating nature of the marketplace

question

Normal good

answer

a product whose demand rises when income rises, and vice versa.

question

Inferior good

answer

a product whose demand falls when income rises, and vice versa. (Ms. Knoll's mac and cheese example: now that she has more money, she doesn't buy mac and cheese in a box)

question

Shift in supply

answer

when a change in some economic factor (other than price) causes a different quantity to be supplied at every price.

question

Inputs or factors of production

answer

the combination of labor, materials, and machinery that is used to produce goods and services.

question

Factors that affect supply

answer

Natural conditions, input prices, technology, and government policies

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order