econ terms to know

Economics: the science of choices

  • resource allocation

  • examining alternatives

Scarcity: limited resources, unlimited wants and needs

Utility: the amount of satisfaction as opposed to tradeoffs

opportunity cost: sacrifice something to get something back, tradeoffs

Explicit Cost: prices paid for goods and services

  • ex: the price of a pair of shoes costs 60$

Implicit cost: non-monetary costs

  • ex: losing time, productivity

Calibrate trade offs by: considering all factors

Cost benefit analysis: PACED model

  • economic decision are not impulsive

P - problem

A - analysis

C - criteria

E - evaluate

D - decide

tariffs: a tax imposed by government on imported goods and services

  • hurt consumers

  • Protect niche companies and industries

  • Punish other countries, bargaining

  • Raise both import and domestic prices

Tariffs: A tariff is a tax imposed by a government on imported goods and services. It serves several purposes:

  • Revenue Generation: Tariffs can generate significant revenue for the government.

  • Protectionism: They aim to protect domestic industries from foreign competition by making imports more expensive.

  • Trade Policy Tool: Tariffs can also be used as a negotiation tool in trade agreements.

Different types of tariffs include:

  • Ad Valorem Tariffs: A percentage of the value of the imported goods.

  • Specific Tariffs: A fixed fee based on the unit of the imported goods.

  • Compound Tariffs: A combination of both ad valorem and specific tariffs.