Shared Flashcard Set

Details

Intro to Macro -midterm 1
1-3 chapters of flash cards
45
Economics
Undergraduate 1
01/30/2013

Additional Economics Flashcards

 


 

Cards

Term
Absolute Advantage
Definition

The ability to produce the same good using fewer inputs than another producer. 

 

ex. Gus had an absolute advantage in meth production over Walter White in season 2.

Term
Production Possibilities Frontier
Definition
Shows all the combinations of goos that a country can produce given its productivity and supply of inputs.
Term
Opportunity Cost
Definition
  1. The opportunity cost of an activity is what you forego in order to engage in that activity, compared to the best available alternative 

Term
  • Thomas Carlyle 

Definition
  • ‘TANSTAAFL’, ‘you can’t get something for nothing’

    1. commonly thought to be his response to the prediction by Thomas Malthus that population growth would exceed economic growth, and hunger would increase 

     

Term
Friedrich Hayek 
Definition
emphasised the role of the price system in simplifying the decision- making process  
‘local’ knowledge
Term
‘local’ knowledge
Definition

for consumers: our budget, our tastes, the goods on offer and

crucially their prices 

Term
Adam Smith
Definition
father of modern economics, introduced the notion of the ‘invisible hand’ 
Term
Invisible Hand
Definition
Guided by this invisible hand, isolated individual decisions combine to create an efficient outcome at the level of society as a whole 
Term
production possibilities frontier 
Definition
is a graph that shows the combi- nations of output that can possibly be produced given the available factors of production and the available production technology 
Term
Autarky
Definition
A state where no one trades.
Term
David Ricardo 
Definition
The theory of comparative advantage and trade is due to... 
Term
Economist Paul Samuelson was once asked by mathematician Stanislaw Ulam what?  
Definition
To name a single proposition in social science which is both true and non-trivial, should have said comparative advantage 
Term
  1. Diseconomies of scope 

Definition
the more an individual specialises in her activities, the more productive she becomes. 
Term
Market
Definition
A collection of buyers and sellers of a particular good or service 
Term
  1. quantity demanded 

Definition
  1. The amount of a good that buyers are willing and able to purchase 

Term
law of demand 
Definition
holds that, other things equal, the quantity de- manded of a good falls when the price of the good rises 
Term
demand schedule 
Definition
a table that shows the relationship between the price of the good and the quantity demanded 
Term
demand curve 
Definition
a graph of the relationship between the price of a good and the quantity demanded 
Term

diminishing marginal utility 

Definition
you can only eat so many oysters before you dont want anymore.
Term

Market demand 

Definition

refers to the sum of all individual demands for a par-

ticular good or service

Horizontal in graphs!

Term
Cause shifts in demand curve...
Definition
  1. Consumer Incomes
  2. Consumer tastes
  3. Prices of substitutes or complements
  4. Number of buyers
  5. Expectations
Term
Normal Good
Definition
A rise in income raises the demand
Term
Inferior Good
Definition
A rise in income lowers demand
Term
Complement
Definition
Demand falls when the price of this rises
Term
Substitute
Definition
Demand rises when the price of this rises
Term
quantity supplied 
Definition
the amount of a good that sellers are willing and able to purchase 
Term
law of supply 
Definition
holds that, other things equal, the quantity supplied of a good rises when the price of the good rises 
Term
supply schedule 
Definition
a table that shows the relationship between the price of the good and the quantity supplied 
Term
supply curve 
Definition
a graph of the relationship between the price of a good and the quantity supplied 
Term

increasing marginal costs 

Definition

associated with oyster production it’s easier to get your hands on the first one than the fifth (e.g. must swim deeper). . . 

Term
Market supply 
Definition

Refers to the sum of all individual supplies for a particular

good or service
Term

Equilibrium 

Definition

refers to a situation in which the price has reached the level

where quantity supplied equals quantity demanded 

Term
Goldin & Katz 
Definition

Are valuable skills becoming more rare, and thus becoming better re-

warded? Or is it something to do with the demand for these skills? 

Term
Consumer surplus 
Definition

A buyer’s willingness to pay for a good minus the amount the buyer actually pays for it 

 
Term

Producer surplus 

Definition

the excess of the price of a good over what a seller

would have been willing to sell it for (his cost of production) 

Term
Stop producing a good when...
Definition

when the marginal benefit of one more unit of

the good falls to equal the marginal cost of that good 

Term
Elasticity 
Definition

a measure of the responsiveness of supply and demand to

changes in the price 

Term
  • a relatively flat curve is ‘elastic’ 

Definition
  • it implies a large change in quantity supplied/demanded for a given change in price 

Term
  • a relatively steep curve is ‘inelastic’ 

Definition
  • it implies a small change in quantity supplied/demanded for a given change in price 

Term

Price ceilings 

Definition

lead to excess demand

  1. Rent control 

Term
  1. Price Floor

Definition
Minimum wage
Term
deadweight loss 
Definition
resulting from a tax is equal to the falls in consumer and producer surplus, minus the government revenue that results 
Supporting users have an ad free experience!