econ 101 bitch
Terms
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copy deck
- production
- transforming inputs int outputs
- consumption
- the using up of production to satisfy human wants
- five factors of production
- captial, land, labour tecnology, entrepenurship
- goods
- trangible commodity
- services
- intangible commodity
- Free good
- ulmimited supply
- Oportunity Cost
- the value of the forgone of the next best alternative
- production possiblity curve
- shows all possible combinations of production if all inputs are fully employed at normal utilizationr ate given income and prices of inputs
- comparative advantage in ppc
- inputs used first assume the msot efficient factors used first adn the msot inefieicnet resoruces are swithced otu fist
- law of increasing marginal oportunity cost
- the OC of X increases as the production of X increases, to make more X one must give up even more Y
- for key economic problems for any economy
- production- what is proeduced and by whom consumption what is consumped and by whom,, disntribution fo income
- macroeconomics
- idel capacity, why is the economy below ppc, increase productive capaicty, how to shift ppc outward.
- specialization principle
- specialization of labour requires trade and markets
- specialization of labour
- worker focuses on producing certain commodity
- division of labour
- worker does part of the production process
- globalization
- caused by advancements in transporation and communication increaes net GD
- tradtional
- allocation and distribution based on custom, effective in an unchanging enviroment eg fuedal system
- command
- allocationa dn distiribution by central planning authoirty
- market
- allocation and distribution by private houshold and firm, free makret enterprise economy, have difficulties with externatlites, public godos and monoplies
- walls come tumbling down
- failure of cordination fialure of quality control misplaced incentives enviromental degredation.
- freedom of contract
- in traditional economies seller could not refuse to sell
- private property
- fuedal times no private property
- postive
- statement about what is, often testable by appeal to facts, my professor is funny
- normative
- a statment about what ought to be, value judgment,not testable, your professor should improve his jokes
- conditions of aapplciation
- constrains on a theory
- models
- 1) a theory 2) qauntitve formulation of a theory
- refutation test
- proper way to test a theory is to determine if it can be refuted by evidence
- confirmation test
- yeilds inconclusive resutls by looking for evidence taht confimrs hyptohessis.
- index number
- absolute value of of period n / absolute value of vase period
- frow varaible
- a varible over a over a certian time period
- stock varible
- point in time
- ceteris paribus varibles for demand
- income tastes advertising price of outher goods population wealth expecations
- complement
- used jointly balla nd bat, +
- substitue
- used alternativly -
- demand Curve
- the entire realtionship between p and Q the onsumer is willing to purchas ceteris paribus
- ceterus paribus varibles, supply
- tecnoogy prices of inputs taxes subsidies price of relatied goods (substitution and complement) number of supplies expecations
- absolute price
- in terms of money
- relative price
- in terms anouther good , the ratio of absolute prices
- elastic
- close subsitutes
- inelastic
- poor substitutes
- time period
- elasticiy increases over time
- elasticity depends on perception of necessity
- p rises consumer juts cuts bak adn does without consumer doens need the good luxury
- determinates of elasticity of supply
- affected by the availbility of subsitues of inputs , the more better subsitues of factors the higher E , factors of prodution are interchangable elasticity goes up
- luxury
- postive ealsticiy greater than 1
- necesssity
- postive elasticy less than on e
- necessities
- negative elsticiy
- general equilibruim
- changes in one market effect all outher markets
- parital equibruim
- analysis of a market in isolation assumign no affect on other markets , usefull when market is relativly small, less feedback effets
- price floors
- minimuy price below which price annot fall, effet excess supply winners, some producers, who are luckey enough to sell for more consumers who could have bought more for less
- price ceilings
- maximum prive above which the price cannot go effect of ,excess demand winners, some consumers who get a lower price losers who could of sold for more
- methods allocating short supply
- black market first come first serve sellers prefecnces rationing g prefecnes
- short run rent controls
- initaly supply is ineasltic,
- long run rent controls
- become elastic, housing shorage.
- demand (surplus sit)
- maiximum price consumer willign to pay
- supply (surplus sit)
- minum price producer i willign to except.
- economic surplus
- cooperative surpulus total surplus, value venifit minus cost, for each unti the area below the demand curve and above the supply curve
- problems with acricutlures
- short term, variation in farmers income long term, droppign income
- logn term trends
- increasing domestic supply, slighly increasing domestic doeman decrasing exprot dmeand.
- domestic farm markets
- cuases farm prices to fluctuate inelastic demand
- world markests
- fixed price, income varies as a product of supply
- stabalize quanity
- stockpile when excess dump when shortage
- stablize price
- gaurenteed price pay teh differnce.
- Demand for canadain dollars
- demand for canadian exports investment in canada
- supply of candain dollars
- demand for forein currency canadain investment overseas.