Econ Basics
This is limited resources but unlimited wants.
Scarcity
These places in the economy are represented by points A, B, and C on the PPC graph.
A - Efficient
B - Inefficient
C - Unattainable
This is the natural rate of unemployment in the US.
4-6%
This is the "acceptable" rate of inflation in the US.
1-4%
This is a product that is always the same no matter who produces it. (Oil, steel, produce)
Undifferentiated product
This is the single next-best thing you give up when making a decision.
Opportunity cost
These are the three shifters of the PPC.
Technology, trade, and resources
These are the three goals of all economic system.
Economic growth, limit unemployment, limit inflation
This is extreme inflation, which negatively affects the economy.
Hyperinflation
This is something other than price that is used to attract customers and is one of the barriers to entry in an oligopoly. (Advertising)
Product differentiation costs
This is the difference between price and cost.
Cost is paid by producers, price is paid by consumers.
This is a producer's ability to make goods and services at a lower per-unit opportunity cost. They specialize in that good and trade with others.
Comparative advantage
These are the three types of unemployment.
Frictional - in between jobs
Structural - no job because no skills
Cyclical - no job because of a recession
This group of people are helped by high inflation and this other group of people are hurt by high inflation.
Helped - Borrowers with existing loans
Hurt - Lenders (banks)
This is a market with many fully informed buyers and sellers, an identical product, and ease of entry and exit.
Perfect competition
These are the four factors of production.
Land, labor, capital, entrepreneurship
This is when the resources to produce two goods are not closely related or switched for one another, like cacti and pineapple.
Increasing opportunity cost
These are the three types of goods that are not included in a country's GDP.
Intermediate goods, non-production transactions, and illegal/black market goods.
This is high inflation and high unemployment, makes prices decrease.
Stagflation
These are the three barriers to entry in a monopoly.
Economies of scale, control of natural resources, legal restrictions.
This is an economic system in which the government makes all the decisions.
VS
This is an economic system in which the government has NO role in answering the fundamental economic questions.
Centrally planned economy
VS
Free market
This is when products have resources that are easily switched for one another, like corn and wheat or pizza and calzones.
Constant opportunity cost
This is the equation used to determine GDP.
C + I + G + Xn(X-M)
C - consumer spending, I - business investment, G - government spending, Xn- exports minus imports
This is a decrease in the increase of inflation rates. Slows down the rate of inflation.
Disinflation
This is a market structure in which many firms sell a similar but not identical product. The product is closely related enough that it can be substituted.
Monopolistic competition