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ECN 143:Notes:Day 2
ECN 143:Notes:Day 2
52
Business
Undergraduate 1
01/13/2016

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Cards

Term
The slope of a tangent line on a curve's minimum or maximum will be what?
Definition
Zero
Term
What does Ceteris Paribus Mean?
Definition
"Other Things Equal"
"All Else Equal"
Term
What is the Ceteris Paribus Assumption?
Definition
For the purpose of a statement screening out factors that perturb a relation of interest
Term
Where are economic decisions made?
Definition
At the margin
Term
What does it mean to make economic decisions at the margin?
Definition
Decisions are made by examining the consequences of making relatively small changes from the existing (current) situation.
Term
What is Marginal Analysis?
Definition
Economic Decisions made at the margin.
Term
What does Marginal Analysis Allow One to Do?
Definition
It allows one to conceptualize how much of a variable is enough.
Term
What is the late night phone call example?
Definition
A hypothetical student faces the choice at some point that they are studying late at night for a test the next day, or hanging out with a significant other.
Term
What is the correct answer to the late night phone call example?
Definition
The significant other asks them out, but they deny the request, claiming that their studying is more important than the significant other but only at the margin.
Term
What is not the issue of the late night phone call example?
Definition
The total value of studying VS.
The total value of time spent with significant other
Term
What is the issue of the last night phone call example?
Definition
Value of Studying the next two hours VS.
Value of time with significant other the next two hours
Term
The conditions of a situation determine the what?
Definition
The marginal benefits and costs of a situation.
Term
Good things are what?
Definition
Desirable
Term
You can have too much of what?
Definition
A good thing
Term
When do you have too much of a good thing?
Definition
When marginal benefits become less than the marginal cost (including what we forego to get more).
Term
What does Forego mean?
Definition
Omit or decline to take (something pleasant or valuable); go without.
Term
What type of science is economics?
Definition
A Social Science
Term
What is the fundamental economic problem?
Definition
Scarcity
Term
What are examples of variables that are scarce?
Definition
Admissions to Harvard
-----------------------
Term
How Are Admissions to Harvard an Example of Scarcity?
Definition
There are less available spaces for students then there are the number of students applying for those spaces.
Term
What Problem is there in the Admissions to Harvard Example of Scarcity?
Definition
Harvard must choose how to allocate the scarce number of available spaces to the applicants and must forego opportunities to teach those applicants that they reject.
Term
In the Admissions to Harvard Example of Scarcity what is generated between the applicants due to the number of applicants being larger than the number of available spaces?
Definition
Competition
Term
Scarcity is faced by what entities?
Definition
All entities
Term
What breeds competition?
Definition
Scarcity
Term
What is the Scarcity Problem?
Definition
Unlimited Wants are limited by limited resources. All resources are limited.
Term
What is Utility?
Definition
Satisfaction/Enjoyment
Term
What do Goods and Services Do?
Definition
Provide Utility
Term
What are synonyms for resource?
Definition
Input and Factors of Production
Term
What is land?
Definition
All naturally occurring resources
Term
What is an example of land?
Definition
Farm Land
------
Oil
----
Wood
---
Water
Term
What is Labor?
Definition
Physical and mental talents of men and women usable in production.
Term
What is capital?
Definition
All manufactured aids to production.
Term
What are some examples of capital?
Definition
Machines
---------
Tools
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Buildings
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Infrastructure
Term
What is Real Capital?
Definition
An actual scarce resource that is a manufactured aid to production.
Term
What is Financial Capital?
Definition
Money used to obtain real capital.
Term
What are the four types of resources?
Definition
Land
-----
Labor
-----
Capital
-----
Entrepreneurial Ability
Term
What are examples of things entrepreneurs do?
Definition
Organize Production
--------------------
Manage Production
--------------------
Takes Risks
--------------------
Innovates Often
-------------------
Makes Difficult Non-Routine Decisions
-------------------
Term
What do innovators do?
Definition
Take existing resources and find new ways to use them
Term
What are Wants?
Definition
Goods and Services
Term
What are Factor Payments?
Definition
Payments made to the owner of a scarce resource for the goal of acquiring scarce resources.
Term
What is an example of a factor payment made on land?
Definition
Rent
Term
What is an example of a factor payment made on labor?
Definition
Wages and Salaries
Term
What is an example of a factor payment made on capital?
Definition
Interest
Term
What is an example of a factor payment made on entrepreneurship?
Definition
Normal Profit
Term
What do factor payments represent?
Definition
Opportunity Costs
Term
Factor Payments are a valuation of a resource's what?
Definition
Next best alternative use.
Term
What is a labor/leisure choice?
Definition
A worker chooses between labor and leisure depending on the amount of pay from labor.
Term
How is Labor defined in the labor/leisure choice?
Definition
Time spent working for pay
Term
How is Leisure defined in the labor/leisure choice?
Definition
Time Not spent working for pay
Term
The Cost of Capital is what?
Definition
Expensive
Term
Most Entrepreneur's transition into an entrepreneur from what?
Definition
Being a laborer
Term
What is Normal Profit?
Definition
The entrepreneur's salary
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