200 MT 1

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tuchiyama10
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264751
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200 MT 1
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2014-03-02 18:54:02
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  1. Explicit cost
    you spend money
  2. Implicit cost
    non-monetary opportunity cost
  3. equity
    = net worth
  4. economic profit
    = rev - explicit and implicit costs
  5. securitization of mortgages
    putting mortgages in pools then having people buy fractions of the debt --> diffuse risk
  6. CPI consumer price index
    • Produces monthly data on changes in the prices
    • paid by urban consumers for a representative basket of goods and services

    SA = seasonally adjusted rose +0.1% in month of January 2014

    Non SA = +1.6% since Jan 2013
  7. absolute advantage
    the ability of an individual, firm, or country to produce more of a good/service than competitors, using the same amount of resources
  8. competitive advantage
    the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors --> basis for trade
  9. market?
    a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade
  10. rationality
    wanting more rather than less of a good
  11. national unemployment rate
    6.6%
  12. CA unemployment
    decreases to 8.3%
  13. production possibility frontier
    a graph that shows various combos of amounts that two commodities could produce using the same fixed total amount of each of the factors of production
  14. producer surplus
    the difference between the lowest price a firm would be willing to accept for a good or service and the price it actually receives (area above curve to the equilibrium price)
  15. consumer surplus
    the difference between the highest price a consumer is willing to pay for a good or service and the price the consumer actually pays (area under curve to the equilibrium price)
  16. substitution effect
    the change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods that are substitutes
  17. income effect
    the change in the quantity demanded of a good that results from the effect of a change in the good’s price on consumers’ purchasing power
  18. normal good
    a good for which the demand increases as income rises and decreases as income falls --> same; think cars
  19. inferior good
    a good for which the demand increases as income falls and decreases as income rises --> opposite; think toilet paper
  20. moral hazard
    insurance (if someone else is picking up the cost, then we tend to behave in a manner that tends to hurt the person picking up the cost)
  21. Q4 gdp growth
    • real +3.2%
    • 1.2% inflation -> nominal GDP growth 4.4%
  22. Q3 gdp growth
    • real +4.1%;
    • +1.8% inflation -> nominal GDP is 5.9%
  23. gdp average for 2nd half of year
    2.6%
  24. DJ industrial avg now and 07
    • 16,300
    • 12-13k
  25. Fed funds rate
    • from 1 to 5.25 back to 0
    • last 4 years: around 0
  26. individual mandate
    a requirement by law that certain persons purchase or otherwise obtain a good or service -> health insurance in the US
  27. asymmetric info
    you provide skewed info based on what you know about the products, seller may have different info from the buyer

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