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Principles of Macroeconomics - Test 1
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economics
the coordination of wants & desires given the mechanism
3 central problems of coordination
-what to produce
-how to produce
-who gets it
if the marginal cost is more than the marginal benefit
don't do it
if the marginal cost is less than the marginal benefit
do it
opportunity cost
the benefit you might have gained by choosing the next best alternative
3 economic forces
market
social
political
market economic force
invisible hand
social economic force
invisible handshake
political economic force
invisible foot [legal]
positive economics
economists often disagree with each other and occasionally themselves, but they can all agree: people respond to incentives
normative economics
"you
should
give the extra to a food bank"
[if it says
should
or
ought
on the test is the answer]
efficiency
any point on the curve is consider efficient
technical change
why the curve can move
points outside the curve are considered:
impossible
law of one price [goods]
creatable goods should be sold at a similar price
law of demand
price goes down, quantity demand goes up,
other things constant
demand factors
income
price of other goods
tastes
expectations
taxes or subsidies
supply factors
price of inputs
technology
expectations
taxes & subsidies
equilibrium
where supply and demand intersect
Q
S
> Q
D
excess supply surplus
Q
D
> Q
S
excess demand shortage
division of gains
smaller countries get more of the gains than larger countries
difference between recession and depression
recession is when you know someone who lost their job
depression is when you lost your job
economies of scale
if you have
economies of scale
you get more gains
law of one prices [wages]
compresses wages [all should be paid the same]
Author
Anonymous
ID
283139
Card Set
Principles of Macroeconomics - Test 1
Description
Macro
Updated
9/15/2014, 8:39:38 PM
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