Macro Exam 1
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| Shift Factors of Demand: | show 🗑
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| Scarcity definition: | show 🗑
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| 2 Elements of Scarcity: | show 🗑
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| What does scarcity depend on? | show 🗑
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| show | Costs associated with a decision that often aren't included in normal accounting costs.
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| Opportunity Cost definition: | show 🗑
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| Economic Decision Rule: | show 🗑
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| Marginal Cost definition: | show 🗑
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| Marginal Benefit definition: | show 🗑
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| Macroeconomics definition: | show 🗑
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| show | inflation, unemployment, business cycles, and growth.
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| Macroeconomics vs Microeconomics: | show 🗑
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| show | the study of how individual choice is influenced by economic forces.
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| Problems microeconomics considers: | show 🗑
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| 3 Central Coordination Problems: | show 🗑
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| show | The 3 Central Coordination Problems
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| show | the study of how human beings coordinate their wants/desires, given the decision making mechanisms, social customs, and political realities of the society.
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| show | the necessary reactions to scarcity.
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| show | An economic force that is given relatively free rein by society to work through the market.
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| Economic Policies definition: | show 🗑
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| show | Costs that have already been incurred and cannot be recovered.
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| If you bought a camper for $27K, and you have no marginal benefit, is there a sunk cost? | show 🗑
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| Theorems definition: | show 🗑
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| Precepts definition: | show 🗑
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| Experimental Economics definition: | show 🗑
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| Types of experimental economics: | show 🗑
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| show | a framework that places the generalized insights of the theory in a more specific contextual setting.
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| show | a commonly held economic insight stated as law or principle.
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| Social Forces definition: | show 🗑
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| Political Forces definition: | show 🗑
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| show | SHOULD. The study of what should be.
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| Positive Economics definition: | show 🗑
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| show | application of the knowledge learned in positive economics to achieve the goals one has determined in normative economics.
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| Invisible Hand Theorem: | show 🗑
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| Coercion definition: | show 🗑
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| How does a government deal with scarcity? | show 🗑
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| Excess Demand | show 🗑
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| Will price increase or decrease in shortages? | show 🗑
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| Excess Supply | show 🗑
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| show | Price will decrease. Quantity demanded will increase.
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| show | the price toward which the invisible hand drives the market
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| show | the amount bought and sold at equilibrium price
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| Equilibrium definition: | show 🗑
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| show | Downward (surplus)
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| show | Upward (shortage)
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| What causes a shift in supply? | show 🗑
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| show | A change in price causes a movement along the supply curve.
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| show | Shift the entire curve.
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| Law of Supply: | show 🗑
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| Shift Factors of Supply: | show 🗑
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| How does price of inputs shift supply? | show 🗑
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| How does technology shift supply? | show 🗑
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| How do expectations shift supply? | show 🗑
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| Supply Curve definition: | show 🗑
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| What does the supply curve represent? | show 🗑
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| Quantity Supplied-Supply: | show 🗑
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| What causes a movement along a demand curve? | show 🗑
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| Market Law of Supply: | show 🗑
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| show | the horizontal sum of all individual supply curves.
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| Quantity Demanded definition: | show 🗑
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| show | The quantity you demand at low prices differs from the quantity you demanded at high prices.
The quantity you demand varies in OPPOSITE direction with price.
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| show | states that the quantity of a good demanded is inversely related to the price.
Quantity demanded rises as price falls.
Quantity demanded falls as price rises.
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| show | People substitute away from that good to other goods.
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| Demand Curve: | show 🗑
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| Demand definition: | show 🗑
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| Shifts in Demand: | show 🗑
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| show | Change in price changes quantity demanded.
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| What causes a movement OF the demand curve? | show 🗑
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| Market Law of Demand: | show 🗑
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| Market Demand Curve: | show 🗑
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| Should Opportunity Cost be less or more than the benefit of what you have chosen? | show 🗑
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| show | Opportunity Cost
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| show | laws, common practices, and organizations in society that affect the economy.
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| Positive vs Normative Economics: | show 🗑
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| What happens to demand for CD's if you won $1 million in the lottery? | show 🗑
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| show | as income rises, you buy more of these.
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| show | as your income rises, you buy less of these.
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| An increase in demand or a decrease in supply does what? | show 🗑
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| A decrease in demand or an increase in supply does what? | show 🗑
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| Fallacy of Composition definition: | show 🗑
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| show | The damage shifts the supply curve for apples to the left. Prices rose.
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| show | Increasing costs caused the demand curve to shift left. Price for SUVs fell.
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| show | Price goes down, quantity up.
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| What happens to P and Q: when supply decreases | show 🗑
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| What country has price controls? | show 🗑
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| show | a government-imposed limit on how high a price can be changed. (You walk along and keep bumping your head, can't get up)
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| show | shortages
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| show | When they want to hold prices down to favor buyers.
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| After WWII, rent controls were put into place. What is this an example of? | show 🗑
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| show | A shortage
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| show | a government-imposed limit on how low a price can be charged.
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| show | Excess supply (surplus)
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| show | To prevent a price from falling below a certain level to favor suppliers.
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| According to the book, does minimum wage cause unemployment? | show 🗑
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| Is minimum wage price floor or a price ceiling? | show 🗑
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| show | a tax that is levied on a specific good.
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| Tariff definition: | show 🗑
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| What is the result of taxes and tariffs? | show 🗑
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| show | The supply curve shifts up by the amount of the tax. The price of boats rises by less than the tax.
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| show | licenses
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| show | doctors, financial planners, electricians, bus drivers, cosmetologists, etc.
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| What is the result of limited number of licenses in a market? | show 🗑
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| The taxi medallion system is an example of what? | show 🗑
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| In third-party-payer markets, what happens? | show 🗑
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| How are goods from a third-party-payer system rationed? | show 🗑
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| show | 1776: Wealth of nations. Free market.
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| show | Classical
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| Bond vs Stock | show 🗑
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| show | Bonds
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| show | 2.5%-3.5%
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| Normal Unemployment? | show 🗑
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| Classical Economists definition: | show 🗑
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| show | Classical
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| show | believe that business cycles reflect underlying problems that can be addressed with activist government policies.
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| Examples of Keynesian economics after depression were: | show 🗑
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| show | a period of protracted slow growth.
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| What happened after the crash of 2008? | show 🗑
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| What does the long-run growth framework focus on? | show 🗑
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| What does the short-run business cycle focus on? | show 🗑
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| show | 8%. More development to do.
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| show | lower
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| Potential Output definition: | show 🗑
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| Per capita output definition: | show 🗑
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| show | the upward/downward movement of economic activity that occurs around the growth trend.
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| show | They argue that government should just accept that business cycles occur and take a laissez-fair stance.
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| show | Argue that government can temper these fluctuations with policy actions.
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| show | Classical
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| After Great Depression, Classical or Keynesian? | show 🗑
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| Four phases of the business cycle? (in order) | show 🗑
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| show | the peak
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| Recession definition: | show 🗑
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| show | the economy enters the downturn and may enter a recession.
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| What is the bottom of a recession or depression called? | show 🗑
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| show | the economy comes out of the trough and enters the upturn.
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| show | a cyclical downturn that is becoming an increasing part of the macroeconomic debate.
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| Unemployment Rate definition: | show 🗑
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| show | No. You aren't considered unemployed.
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| Cyclical unemployment definition: | show 🗑
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| show | No
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| show | caused by the institutional structure of an economy or by economic restructuring, making some skills obsolete.
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| Labor force definition: | show 🗑
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| Early capitalism unemployment solution: | show 🗑
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| Employment Act of 1946: | show 🗑
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| show | want a job but can't find one. Stop looking for one.
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| Underemployed definition: | show 🗑
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| Full Employment definition: | show 🗑
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| Frictional unemployment definition: | show 🗑
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| Target Rate of unemployment definition: | show 🗑
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| Cyclical unemployment is defined as unemployment that results from: | show 🗑
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| The business cycle is? | show 🗑
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| The long-run growth framework focuses on factors affecting: | show 🗑
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| show | frictional unemployment
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| If output is below potential output, it is most likely that the economy is: | show 🗑
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| T/F: The answers to an economy’s three central economic problems are determined by the interaction of three forces: economic forces, political forces, and social forces. | show 🗑
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| show | False
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| T/F: Scarcity exists because economies cannot produce enough to meet the perceived desires of all individuals. | show 🗑
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| show | False
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| show | False
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| T/F: the “invisible hand” is the price mechanism that guides people’s actions in the market. | show 🗑
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| T/F: Social and political forces affect the way in which the invisible hand works | show 🗑
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| T/F: Macroeconomics is the study of how individual choices are affected by economic forces | show 🗑
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| T/F: Deciding what the distribution of income should be is an example of normative economics. | show 🗑
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| show | True
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| show | False
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| show | True
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| show | False
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| T/F: An improvement in the technology for producing a good will shift the supply curve for that good to the left. | show 🗑
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| T/F: Real world experience shows that when weather conditions reduce crop yields, the price of agricultural products will fall. | show 🗑
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| T/F: When the person who chooses how much to purchase doesn't have to bear the full cost, the quantity demanded tends to be higher. | show 🗑
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| show | True
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| show | False
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| show | False
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| show | True
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| T/F: When quantity demanded is greater than quantity supplied, the resulting shortage causes the prices to fall. | show 🗑
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| show | Their approach of trying to charge the costs of spamming is the most effective way to change behavior
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| An increase in demand for a good is likely to cause: | show 🗑
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| show | if the US exchange rate falls
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| show | Because incentives that encourage work and reduce human desires cannot keep new wants from developing.
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| show | the art of economics
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| show | equals the increase in total benefits from consuming the unit.
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| Suppose the marginal cost of dating Perry is $30 and the marginal benefit is worth $40 to you. Following economic reasoning, you should? | show 🗑
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| show | The price of the cover and the benefit she will get from it.
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| show | Any, all sunk costs.
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| At a Chicago Bulls game 20,000 tickets were sold at $30. The game was sold out and some didn't get tickets. This suggests that the selling price: | show 🗑
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| show | Shortage of oranges as the price ceiling keeps the market from reaching equilibrium.
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| show | a surplus
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| If the gov were to issue a fixed number of licenses to produce a good or provide a service, this would likely? | show 🗑
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| show | The supply of the imported steel shifts to the left and raises its market price.
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| show | positive economics
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| show | normative conomics
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| show | Irrelevant
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| The invisible hand theorem relates mostly to macro or micro? | show 🗑
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| "we should support the market because it is efficient" is an example of: | show 🗑
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| The term efficiency involves achieving a goal as: | show 🗑
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| show | a reaction to scarcity
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| show | the goods they can produce at the lowest opportunity cost.
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| Your opportunity cost of taking this course is: | show 🗑
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| show | $8.
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| The growing popularity of the Atkins diet caused? | show 🗑
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| show | people to buy fewer trading cards
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| show | price
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| show | human action
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| show | a market force
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| The price of computers has fallen each year for the last 10 years. This is likely an example of the working of: | show 🗑
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| show | invisible hand
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| Compared to last year, fewer oranges are being bought and the selling price decreased. This could have been caused by: | show 🗑
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| show | be reflected graphically as a leftward shift of the supply curve
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| show | an increase in the equilibrium quantity, but an uncertain effect on the equilibrium price.
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| show | Shift the supply curve by the amount of the tax.
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| show | if the marginal benefit of the last unit of an activity exceeds its marginal cost, the more of that activity should be undertaken.
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| Output fell by how much during the depression? | show 🗑
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| show | 25%
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| Short-run issues, Classical or Keynesian? | show 🗑
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| show | Classical
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| show | They argued that labor unions and government policies kept prices and wages from falling. The invisible hand was not being allowed to coordinate economic activity.
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| Classical Economist prescription for the depression: | show 🗑
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| What is one issue Keynesian economics left out? | show 🗑
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| show | 1980's
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| show | output declined, unemployment rose, entered a recession.
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| show | incentives for supply. Policies that affect supply, such as incentives that promote work, are key.
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| Short-Run framework focuses on: | show 🗑
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| show | No, the economy is constantly in both of them.
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| When the economy grows, what happens to income and output? | show 🗑
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| show | Slowly until the 1990s, now increasing substantially.
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| Growth rates of Western Europe and Japan: | show 🗑
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| show | determines the government's official dates of contractions and expansions.
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| Depression definition: | show 🗑
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