Section 1
Equations
section 2
Section 3
100
S.T.O.R.G
Scarcity
trade offs
opportunity cost
rationality
gains from tarde
100
price of elasticity
Price elasticity of demand = (Percentage change in quantity demanded)
(Percentage change in price)
100
Whata id CPI
Consumer Price Index (CPI): cost of purchasing a market basket of goods and services–represents typical consumer
100
Y = C + I + G + NX
Y – income
C – consumption expenditures
I – investment
G – government purchases
NX – net exports
200
Law of demand
Negative relationshop between price and quantity demanded
200
PRICE ELASTICITY OF SUPPLY
Price elasticity of supply = (Percentage change in quantity supplied)
(Percentage change in price)
200
People who have no work but seek work.
Unemployed
200
Smaller R or C – larger money supply will become
300
when does a shift in supply happen?
T.I.E.N
Technology–reduce labor
Input prices
Expectations–suppliers expect future prices
Numbers of sellers
300
total revenue
Total Revenue = P x Q (price multiplied by equilibrium quanitity)
300
Cyclical Unemployment
Cyclical Unemployment: recessions make it harder for job seeking
300
Velocity of money – average numer of times a typical dollar is used during a year
Y – real GDP
P – price level
M – dollars in circulation
400
What is isolated economy
Production Possibility Frontier (PPF)-- trade-offs one faces when producing
400
Marginal cost
Marginal Cost = (total cost) / (Increased Quantity of production)
400
What is the equation for CPI
CPI in year t = 100 × (cost of bundle in year t) / (cost of bundle in base year)
400
what is Okun's law
if cyclical unemployment increased from 1% to 2%--output gap would rise from 2% to 4%
500
What companies act like monopolies
what are cartels
500
GDP
GDP = C + I + G + NX
500
THE CIRCULAR FLOW MODEL OF THE ECONOMY
model shows interactions between households, firms, and gov't
capital goods owned by households
500
The General Theory of Employment Interest and Money
inadequate microecomic models failed to account for Great Depression