I AM NOT UNEMPLOYED

Review

67

What is the law of demand?

Negative correlation between price and quantity bought

200

Give an example of complement good

Good that goes up in price when another does

300

The price of diet coke increases by a million billion.
What happens to the demand curve for diet pepsi?

Shift to the right

400

Define and give an example of an inferior good

Good that goes down in demand when people have higher income (not a luxury good)

500

Give 2 examples of a shock that would shift the supply curve to the right

(Must give two, no fun allowed)

Less Input Prices
Better Technology
Higher Expectations of Profit
Increased Number of Sellers

Stretchiness

67

A good has few substitutes - what kind of elasticity is this good?

Elastic or inelastic?

Elastic

200

A good's elasticity is a straight line - how elastic is this good?

Extremely elastic

300

What is the formula for supply elasticity?

Percent change in quantity supplied/Percent change in price

400

A market has a product with a demand elasticity > 1. What does this tell you about the item?

This means with a small shift in price, the quantity demanded also changes at a high rate.

1. Has substitutes
2. Is a luxury (not a necessity)
3. Is a large portion of income (House, cars)
4. Broadly defined good

500

What does it mean for something to be unit elastic

Elasticity is 1 = Consumers respond normally to price - stable

Get a job

67

Am I unemployed?

NO I AM NOT UNEMPLOYED. ALTHOUGH I AM OF WORKING AGE, I AM NOT IN THE LABOR FORCE BECAUSE I AM NOT ACTIVELY LOOKING FOR A JOB. BECAUSE I AM NOT ACTIVELY LOOKING I AM NOT UNEMPLOYED. READ THE TITLE PLEASE.

200

Let's say I, hypothetically somehow graduate, and I, hypothetically am looking for a job. Hypothetically, what kind of unemployment am I?

Frictional unemployment

300

What is an underemployed worker?

Works part time but wants full time

400

Define structural unemployment

Skills do not match the modern need - need retraining, etc

500

What is natural unemployment?

Structural + frictional

CIGXn

67

Calculate the GDP
$1 of Consumption
$2 of Income
$3 of Social Security
$4 of Military Spending
$5 of Dubai Chocolate imported from Dubai
$6 of Moonshine exported to Canada

$8

200

What is investment?

Capital goods - bread machines

300

Problems of GDP?

Double counting sometimes
Does not account for out-of-market stuff (babysitting)
Doesn't measure the wellbeing of people

400

Real GDP vs Nominal GDP

Real accounts for inflation
Nominal is just pure money

500

What is the alternate way to calculating GDP?

Wages + Interest + Rent + Profit

I didn't teach you this

67

Define absolute advantage

Extra: Define comparative advantage

Absolute: Can produce more goods
Comparative: Can produce goods at a lower opportunity cost

200

What is a natural monopoly?

No reason to have more than one supplier - public utilities, railroads

300

Nominal wages is up 10%
Inflation is around 5%
What is the real wage?

About 5%

400

Name the 4 parts of the business cycle

If you do it in order, Aayush will give you a high-five

Expansion, Peak, Contraction/Recession, Trough

500

Define logrolling

Vote for me and I vote for you