ECON Exam 2

An Example of a Price Floor

Minimum Wage

An Example of a Price Ceiling

Rent Control

What does it mean for something to be Binding?

Takes effect

What does it mean for something to be Non Binding?

Doesn’t take effect

What is a Surplus of Labor?

Unemployment

Define Tax Incidence

How the burden of tax is shared

How is Tax Incidence determined?

Item elasticities

What does GPD stand for?

Gross Domestic Product

What does GDP measure?

Market value of FINAL goods produced within a country in a given period

What does GNP stand for?

Gross Nation Product

What is a Final Good?

A good in its final state (in the hands of the final user)

What is an Intermediate Good?

Not in the final stage of change (not in the hands of the final user)

What Is the first way to interpret GDP?

Total value added

What Is the second way to interpret GDP?

Total income generated

What Is the third way to interpret GDP?

Expenditures on final good

What is the total value added?

Price of the final good

What is Real GDP?

GDP adjusted for inflation

What is Nominal GDP?

GDP as stated

What is a Recession?

Two consecutive quarters of falling GDP

What is a Depression?

Long term severe recession

What is GDP overall?

Economic well-being of our society

Is GDP is high then what is the quality of life?

high