Study guide exam 1

studied byStudied by 1 person
0.0(0)
learn
LearnA personalized and smart learning plan
exam
Practice TestTake a test on your terms and definitions
spaced repetition
Spaced RepetitionScientifically backed study method
heart puzzle
Matching GameHow quick can you match all your cards?
flashcards
FlashcardsStudy terms and definitions

1 / 40

flashcard set

Earn XP

Description and Tags

41 Terms

1

Opportunity Cost

The cost of an alternative that must be forgone in order to pursue a certain action.

New cards
2

Utility

Satisfaction derived from consuming goods and services.

New cards
3

Positive Economics

Focuses on facts and cause-and-effect relationships.

New cards
4

Normative Economics

Focuses on what particular policy actions should be taken.

New cards
5

Marginal Analysis

If marginal benefits are larger than marginal costs, pursue the action.

New cards
6

Economic Resources

Natural, human, or manufactured inputs used to produce goods and services.

New cards
7

Classification of Economic Resources

Includes Land, Labor, Capital, and Entrepreneurial Ability.

New cards
8

Market System

Known as capitalism; an economic system where decisions are made by individual firms and consumers.

New cards
9

Command System

Known as socialism or communism; an economic system where decisions are made by a central authority.

New cards
10

Law of Demand

There is a negative relationship between price level and demand.

New cards
11

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded.

New cards
12

Individual Demand

The demand from one consumer.

New cards
13

Market Demand

The total demand from all consumers.

New cards
14

Change in Demand vs. Change in Quantity Demanded

Change in Demand is a shift of the demand curve; Change in Quantity Demanded is a movement along the demand curve.

New cards
15

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied.

New cards
16

Determinants of Supply

Factors that affect the position of the supply curve, such as technological improvements.

New cards
17

Equilibrium Price and Quantity

Determined by the intersection of the demand and supply curves.

New cards
18

Surplus

Occurs when supply is larger than demand.

New cards
19

Shortage

Occurs when demand is larger than supply.

New cards
20

GDP per Person

Calculated as GDP divided by population.

New cards
21

Business Cycles

Short-run movements around the growth trend driven by shocks.

New cards
22

Demand Shocks

Unexpected events that affect demand.

New cards
23

Supply Shocks

Unexpected events that affect supply.

New cards
24

GDP measures

The dollar value of final goods and services; the unit for GDP is dollar

New cards
25

Final Goods and Services

Goods and services that are directly consumed by consumers.

New cards
26

Two ways to calculate GDP

Expenditure approach and Income approach

New cards
27

Expenditure Approach to GDP

Calculates GDP by summing Consumption, Investment, Government spending, and Net Exports.

New cards
28

Intermediate Goods

Goods that are not counted in GDP to avoid multiple counting.

New cards
29

Business Cycle

Business cycle are short run movements around the growth trend

New cards
30

Business Cycle Phases

Includes Peak, Recession, Trough, and Expansion.

New cards
31

The production of durable goods is affected more by business cycles than that of non durable goods

Durable purchases are postponable

New cards
32

Unemployment Rate

Calculated as Unemployed individuals divided by Labor Force.

New cards
33

Frictional Unemployment

Workers with desirable skills searching for new jobs or waiting to take new jobs.

New cards
34

Structural Unemployment

Unemployment due to changes in technology.

New cards
35

Cyclical Unemployment

Unemployment caused by economic downturns or recessions.

New cards
36

Natural Rate of Unemployment (NRU)

Sum of frictional and structural unemployment.

New cards
37

GDP Gap

Difference between actual GDP and potential GDP.

New cards
38

Inflation Rate

Calculated as (CPI this year – CPI last year) / CPI last year.

New cards
39

Rule of 70

Estimates the number of years for the price level to double, calculated as 70 divided by the inflation rate.

New cards
40

Demand-Pull Inflation

Inflation resulting from excess total spending in the economy.

New cards
41

Cost-Push Inflation

Inflation resulting from factors that raise production costs.

New cards

Explore top notes

note Note
studied byStudied by 55 people
873 days ago
5.0(1)
note Note
studied byStudied by 8 people
898 days ago
5.0(1)
note Note
studied byStudied by 25 people
805 days ago
5.0(1)
note Note
studied byStudied by 7 people
952 days ago
5.0(1)
note Note
studied byStudied by 26 people
839 days ago
5.0(1)
note Note
studied byStudied by 20 people
705 days ago
5.0(1)
note Note
studied byStudied by 72 people
828 days ago
5.0(1)
note Note
studied byStudied by 259 people
971 days ago
5.0(1)

Explore top flashcards

flashcards Flashcard (41)
studied byStudied by 8 people
138 days ago
5.0(1)
flashcards Flashcard (45)
studied byStudied by 6 people
722 days ago
5.0(2)
flashcards Flashcard (60)
studied byStudied by 15 people
785 days ago
5.0(1)
flashcards Flashcard (148)
studied byStudied by 3 people
819 days ago
5.0(1)
flashcards Flashcard (53)
studied byStudied by 17 people
556 days ago
5.0(1)
flashcards Flashcard (20)
studied byStudied by 2 people
95 days ago
5.0(1)
flashcards Flashcard (20)
studied byStudied by 7 people
740 days ago
4.0(1)
flashcards Flashcard (67)
studied byStudied by 16 people
46 days ago
5.0(1)
robot