Lecture 1 Lecture 2 Lecture 2 Lecture 2 Lecture 2

100

The opportunity cost of time, it's not worth it
Why would someone turn down a free ticket?

100

recession, lousy economic system, market failures and/or unemployment
What are some reasons a country might operate below its production possibility frontier?

100

An increase in the capacity to produce
What is economic growth?

100

The happiness or benefit that is received
Define UTILITY

100

More, Less
When Marginal Benefit is GREATER THAN Marginal Cost, it is a signal to do more or less? What about LESS THAN?

200

Forgone wages and time
What are the opportunity costs of going to school?

200

The U.S. Because they have a more efficient economic system (better technology)
Whose production possibility curve is higher, Russia or the U.S.? Why?

200

An increase in QUANTITY and QUALITY of factors of production
What causes economic growth?

200

MU per dollar
When making consumer choices, we weigh the MU per what for all possible goods?

200

Any move (fall or rise) from this reduces your NET BENEFITS, which makes you worse off
Why are net benefits maximized when MB = MC?

300

Forgone income on funds used
What does interest on funds have to do with opportunity costs?

300

In the market by supply and demand (profits and losses)
How are the choices between corn and steel made in the U.S.?

300

Law of Diminishing Returns
As we near capacity, what economic law kicks in?

300

Marginal costs go up
What do marginal costs do as we consume more?

300

It lowers your MB, which in turn raises your MC
What does moving from farms to cities do to the MB of having children?

400

To max your net benefits
What is the general goal of all actions, to max what?

400

By the government (Totalitarian approach)
How are the choices between corn and steel made in Russia, Cuba and China?

400

Capacity and productivity increase, it fights off scarcity and diminishing returns
What impact does technological change have?

400

Marginal Costs to the Marginal Benefits
We compare what to what in order to make decisions?

400

MC of driving faster goes down because your risk goes down
Why do seat belts and air bags cause people to drive faster?

500

high living standards, equal distribution and stability
Define efficiency, equity and security

500

Mainly by the market but more gov. involvement than the U.S.
How are the choices between corn and steel made in Germany?

500

TOTAL goes up, MARGINAL goes down
As we consume more of a good, what happens to TOTAL UTILITY? MARGINAL UTILITY?

500

NET BENEFITS = MARGINAL BENEFITS - MARGINAL COSTS
Define NET BENEFITS

500

Supply and Demand
What determines almost all prices and wages in our economy?

Econ Exam 1 (2 of )

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