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durable goods
goods that last for a relatively long time, such as refrigerators, cars, and DVD players (typically longer than 3 years)
GDP per capita
GDP/population
GDP
the total market value of all final goods and services produced in a given time period in an economy
Double Counting
the mistake of including both the value of intermediate products and the value of final products in calculating gross domestic product; counting the same production more than once
increasing opportunity cost
a situation in which producing more of one good requires giving up an increasing amount of production of another good
Constant Opportunity Cost
An opportunity cost that remains the same as consumers shift purchases from one product to another along a straight-line budget line.
Value Added
Gross value of the product minus the cost of raw materials and energy
non-durable goods
goods that last a short period of time, such as food, light bulbs, and sneakers
Income Approach
A method of computing GDP that measures the income-wages, rents, interest, and profits-received by all factors of production in producing final goods and services.
Goals for Macroeconomy
Increasing GDP, low unemployment, low inflation
Final Goods & Services
goods and services sold to the final, or end, user
Fallacy of Composition
the incorrect belief that what is true for the individual, or part, must necessarily be true for the group, or the whole
Investment
when firms buy new capital to produce goods & services (ex. factories) also the addition to a country's capital stock over the course of a year
Services
acts or uses for which a consumer, company or government is willing to pay (ex doctor's healing, lawyer's representation)
Economic growth
a steady, long-term increase in real GDP
MRT
Marginal Rate of Transformation - The slope of the PPF, it represents the opportunity cost of producing one additional unit of the good on the x-axis.
Prod. Approach
Sums the “value-added” at each stage of production
Goals for Macroeconomy
Increasing GDP, low unemployment, low inflation
Final Goods & Services
Goods + Services sold to the final/end user
Fallacy of Composition
The idea that something good for the part is good for the whole (wrong)
Services
An act or use for which a consumer, company or govt is willing to pay (ex. doctor healing, lawyer rep)
PPF
A diagram that shows the productively efficient combinations of 2 products that an economy can produce given the resources it has available
Specialization
Individuals who are better at one job should focus on that job (Group work?)
Division of Labor
The way in which different workers divide required tasks to provide a good or service (fordist vs artisanal)
Normative Statement
Analytical
Judgemental
Evaluated as good or bad
an unemployment rate of 7.8% is too high
Positive Statement
fact
no judgement
unemployment rate is 7.8%
Opportunity Cost
A measurement of what is given up in exchange OT COST measures the value of the best foregone alternative
Circular flow diagram
A model that shows how firms and households interact in the labor and goods + services markets. More complicated circular flow diagrams can include the government, world, and financial intermediaries.
Model
A formal statement of a theory, usually a mathematical statement of a presumed relationship between 2 or more variables
Ockham’s razor
The principle that irrelevant detail should be cut away
Macroeconomics
The branch of economics that examines the economic behavior aggregates - income, unemployment, output, etc. on a national scale
Microeconomics
The branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units - that is, firms & households
Intermediate good
a product used in the production of a final good or finished product (ex. tire or salt from a bakery)
Economics
study of choice in the face of scarcity
Note 
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