Foundations Of Economics
This is the study of looking at an economy as a whole, instead of specific markets or products
What is Macroeconomics?
This type of statement is not based on fact, but on values.
What is a normative statement?
This is the relationship all consumers hold in their mind between the price of good, and how much they are willing to buy of it
What is maximum willingness to pay?
This term indicated that GDP has NOT been adjusted for inflation
What is nominal?
This foundation of economics explains the human interest of gaining a reward in exchange for work.
What are incentives?
This model explains how investment in technology can change the potential for output creation in a nation.
What is the production posibility frontier?
This is the name of a movement along the supply curve when the price of an item change.
What is change of quantity supplied?
This is described as missing economic activity due to a distortion in the market, like excise taxes
What is deadweight loss?
This is the formula used to calculate GDP in a given year
What is GDP= C +I + G + NX?
This foundation follows the idea that if everyone freely can choose to exchange different snacks if they want to, on average people will be better off
What is "ceteris paribus"
These are goods that have an inverse relationship between the income of the consumer and the amount of goods purchased.
What are inferior goodss?
This is the type of demand that burdens the consumer most when distortions occur, and never have deadweight loss
What are recessions, depressions and expansions?
This founation is exemplified by the following scenario.
You have been studying for 4 hours, but still could use some time. However, you are very tired and have class in the morning. Should you study for one more hour?
What is marginal thinking?
These types of factors that cannot be accounted for inside of a model
What is exogenous factors?
These are two goods who's demand tend to be linked positively. For instance, if demand for one increases, the other will as well.
Complimentary goods
This type of demand tends to have a slope of 0.
What is perfectly elastic demand?
What goods are not taken into account for fear of double-counting?
What are intermediary goods?
This foundation follows the idea that "Choosing is refusing"
What are opportunity costs??
These three traits are what economists use to guage if a model is helpful for testing hypothesis (points given for 2/3)
What are flexible, simplified and accurate?
These are factors that may cause a shift in the supply curve. (Get 3/5 for the point)
What are...
Cost of production
Changes in technology/production process
Tax and Subsidies
Number of firms in the industry
Price expectations
This is the name of the space between all customer's WIP and all seller's WTS in a given market.
What is surplus?
These are the weaknesses of GDP. (Name 3/4 for the points)
What is missing non-market goods, underground economies, environmental quality, and leasure?