The Wheel of Death
The change in total revenue that results from a one-unit increase in quantity sold.
What is marginal revenue?
What four components make up GDP?
(C + I + G+ NX)
What is responsible for the upward sloping SRAS Curve?
What is sticky wages?
What type of employment results when someone is in between two jobs?
What is frictional unemployment?
How many firms are in a monopoly?
If Quantity Demanded changes by 10% when Price Changes by 20%, in perfect competition will a consumer or producer be hurt more by a tax?
What is the consumer?
If a real estate agent buys a house that a family built 5 years ago, does this transaction count. towards GDP? Why?
What is no, because used goods do not count towards GDP. It counted 5 years ago when it was built.
Name two factors that contribute to sticky wages.
What is Cyclical Unemployment?
What is yes?
What is Mr. Kashdan's Room Number?
What is 327
If I make a million dollars in the stock market, how is the US GDP affected?
What is no affect? Transfers of money are not part of the GDP.
Why are wages sticky in the short-run?
What is because prices change relatively fast, but wages do not? There are labor contracts, etc. that prevent instant changes in wage. Wages are particularly sticky downwards - it will take more than just a brief period of deflation for workers and labor unions to agree to lower wage contracts.
What kind of unemployment results when someone's skills no longer meet job requirements and are no longer useful?
What is structural unemployment?
What is it called when a monopoly exists because they have a very high Fixed Cost?
What is a natural monopoly?
When a market's allocation of resources is not efficient due to factors like monopolies or negative externalities it's identified as this.
If the US owns a car factory in Japan, and this factory sells $5 million of cars to Europe, how is the US GDP affected?
No effect. Foreign transactions, even if owned by a US company, do not count towards GDP.
How sticky are wages in the long run?
What is not sticky at all.
If less people are interested in working in the labor market, what will happen to the equilibrium wage and quantity in the short run.
What is a higher price and lower quantity?
What happens to economic profit in the long-run for a monopolistically competitive firm?
What is normal profit (zero profit)?
This economic theory was developed by John Maynard Keynes during the Great Depression. It emphasizes the role of government intervention through fiscal policy to stabilize the economy.
What is Keynesian economics?
If a trading partner's GDP rises, what happens to our GDP? Which part of GDP goes up or down?
What is net exports increase (bc the other country has more demand for goods and services), so our GDP increases.
If a negative supply shock occurs, what will happen to wages in the long-run?
What is wages will fall (because we are in recession)?
This rate measures the percentage of the total labor force that is unemployed and actively seeking employment during a specified period, such as a month or a year.
What is the unemployment rate?
The intersection of the _____ and _____ curves is the socially optimal quantity of production for a monopoly.
What is MC = P?