Term
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Definition
| the rewards and penalties that motivate behavior |
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Term
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Definition
| the value of the oppertunites lost |
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Term
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Definition
| the increase in the general level of prices |
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Term
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Definition
| quanity demanded at different prices |
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Term
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Definition
| quanity buyers are able/willing to pay at a certain price |
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Term
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Definition
| consumers gain from exchange or different between max price consumer is willing to pay and the actual market price |
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Term
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Definition
| area beneath the demand curve and above the price |
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Term
(shifting the demand curve)
Increase Demand --
Decrease Demand-- |
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Definition
(increase) outward, up and right
(decrease) inward, down and left |
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Term
Goods
- Normal
- Inferior |
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Definition
- demand increases when income increases
- demand decreases when income increases |
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Term
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Definition
| decrease in price for one good, leads to decrease in demand |
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Term
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Definition
| decrease in price for one good, leads to decrease in demand for the other good |
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Term
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Definition
| showing qunatities supplied at different prices |
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Term
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Definition
| the amount of good that sellers are willing/able to sell at a certain price |
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Term
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Definition
| the producers gain from exchange, or the difference between the market price and the minimum price at which a producer would be willing to sell a particular quantity |
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Term
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Definition
| measured by the area above the supply curve and below the price |
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Term
| Higher (oppertunity) cost leads to |
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Definition
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Term
| Expectations shift supply curve |
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Definition
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Term
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Definition
| quantity supplied is greater than quantity demanded |
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Term
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Definition
| quantity demaned is greater than quanity supplied |
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Term
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Definition
| the price at which the qunatity demanded is equal to the quantity supplied |
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Term
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Definition
| quantity at which the quantity demanded is equal to the quantity supplied |
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Term
| At Equalilbrium Quantity there are no... |
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Definition
Unexplioted gains from trade
or
Any wasteful trades |
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Term
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Definition
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Term
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Definition
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Term
| An increase in supply leads to |
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Definition
| reduction in price and increase in quantity |
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Term
| Increase in demand leads to.. |
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Definition
| increase in price and quantity |
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Term
| Market competition brings about an equalibrium |
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Definition
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Term
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Definition
a maximum price allowed by law
(below equalibrium) |
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Term
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Definition
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Term
| When producers have more quantity demanded then they have supplies and money then... |
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Definition
| they reduce the quality and service |
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Term
Price ceilings create wasteful lines.
Total value of wasted time = |
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Definition
| the box with the willingness to pay at the top and the controlled price ceiling at the bottom |
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Term
| Difference between paying in bribes and paying in time |
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Definition
| Paying in time is much more wasteful, because at least when you are paying with bribes the money is being transferred from person to person and not wasted |
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Term
There are also lost consumer and producer surplus from price ceilings.
This area is.. |
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Definition
| to the right of the total value of wasted time and equals the lost gains from trade or deadweight loss |
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Term
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Definition
| total of lost consumer and producer surplus when not all gains from trade are exploited. Both price ceilings and price floors create deadweight loss |
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Term
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Definition
a minimum price allowed by law
(above equalibrium) |
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Term
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Definition
surpluses
lost gains from trade
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Term
| Price floors create surpluses and producers have to compete somehow, by... |
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Definition
| increasing quality and creating quality waste (same place as total value of wasted time) |
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Term
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Definition
| market value of all final goods and services produced within a country in a single year |
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Term
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Definition
| GDP divided by the countries population |
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Term
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Definition
| goods and services that are sold to a company and then stored away for sale at a later stage |
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Term
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Definition
| sold to final users and consumed or held personally |
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Term
| The sale of used goods are not included in... |
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Definition
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Term
| Gross National Product (GNP) |
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Definition
| the market value of all final goods and services produced by a country's permanent residents, whereever located, in a year. |
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Term
Equation for Growth Rates
[image] |
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Definition
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Term
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Definition
| Variables that have not been adjusted for changes in prices. Calculated using prices at the time of the sale. |
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Term
| Increase in production means |
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Definition
| true increases in the living standard |
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Term
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Definition
| have been adjusted for changes in prices by using the same set of prices in all time periods |
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Term
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Definition
| a significant, widespread decline in real income and employment |
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Term
National spending approach to GDP:
Y = C + I + G + NX
Factor income approach to GDP:
Y = Wages + Rent + Interest + Profit
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Definition
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Term
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Definition
| spending is private spending on final goods and services |
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Term
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Definition
| spending is private spending on tools, plany and equipment used to produce future output |
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Term
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Definition
spending by all levels of government on final goods and services.
Transfers are not included |
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Term
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Definition
| the value of exports - the value of imports |
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Term
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Definition
| Rule of 70: If the annual growth rate of a variable is x percent, then the doubling time is 70/x years. |
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