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P&R Chap 1 - Preliminaries
Preliminaries
13
Economics
Kindergarten
09/27/2013

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Term
microeconomics
Definition
branch of economics that deals with the bahvior of individual economics units - consumers, firms, workers and investors - as well as the markets that these units comprise
Term
macroeconomics
Definition
branch of economics that deals with aggregate economics variables, such as the level and growth rate of national output, interest rates, unemployment, and inflation
Term
positive analysis
Definition
analysis describing relationships of cause and effect.
Term
normative analysis
Definition
Analysis examining questions of what ought to be done
Term
market
Definition
Collection of buyers and sellers that, through their actual or potential interactions, determine the price of a product or set of products
Term
market definition
Definition
Determination of the buyers, sellers, and range of products that should be included in a particular market.
Term
arbitrage
Definition
Practice of buying at a low price at one location and selling at a higher price in another.
Term
perfectly competitive market
Definition
Market with many buyers and sellers, so that no single buyer or seller has a significant impact on price.
Term
market price
Definition
Market with many buyers and sellers, so that no single buyer or seller has a significant impact on price.
Term
extent of a market
Definition
Boundaries of a market, both geographical and in terms of range of products produced and sold within.
Term
nominal price
Definition
absolute price of a good, unadjusted for inflation.
Term
real price
Definition
price of a good relative to an aggregate measure of prices; price adjusted for inflation.
Term
Consumer price index
Definition
measure of the aggregate price level
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