StudyDroid: FlashCards on the web, and in your hand!

Tradeoffs

pg.9

Sacrificing one thing to have an other

conflicting goods/services

Marginal cost

pg.5

Added expenses beyond that of another tradeoff

Positive vs. Normative Economics

pg. 10

Positive economics deals with how the market is, theory developement, cause and effect realationships, What the economy is actually like.

Normative economics deals with value judgments of what the economy should be, the desirability of certain economic aspects.

Oppurtunity Cost

pg. 27

The amount of other products that must be forgone or sacrificed to obtain 1unit of a specific good

Production Possibilities Curve
(PPC)

pg. 26

Each point represents the maximum combination of two products

More of one means fewer of another

Points inside are attainable ponits outside are not

Economics

livelyhood of people seeking/fufilment of utility

Consumers

Factors and Holdings

private ownership rights (title) to resources

Hold private information about ownership preference i.e. likes/dislikes, wants, needs

Maximize utility

Marginal Benefit

pg.5

Added benefits (utility)

Allocation of resources

How much of the resource goes into fufulling CC.

Consumption Choice

Favorable Combination

Producers

Factors and Holdings

Look to maximize profits

Hold/Know information about production and ability to implement(Produce)

Economic Principle

People are rational

Tradeofss

People are self interested

Rational people weight benefits vs. cost MB>MC

Cost---sacrifice of having a thing

rational people think at the margin

People rrespond to incentives

Free Enterprise Market

Decentralized market

ppc curve

Capital Market

Global market with no restriction,

i.e. Wall street

Collateriezd debt obligation

Lumping debts together(from seperate sources)

Investor is backed by a more deversifed claim

housing bubble

Economic orginization

A system and its effect on production/efficiency rooted in oppurtunity choice

Adam Smith

"Wealth of nations"

laissez-faire----Free market

Economic freedom, brings extra wealth

Economics

Social science concerned with the efficient use of scarce resources

the discipline that studies how people allocate scarce resources among alternatives, to maximize utility

Substitutes

replacable goods/services

Compliments

A good/service that goes with another

Law of Demand

Refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship.

Economic Problem

How people allocate scarce resouces among alternatives to attain most utility

Law of Supply

Represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price.

Demand curve

Supply Curve

Circular Flow Model

Movements

A movement refers to a change along a curve. On the demand curve, a movement denotes a change in both price and quantity demanded from one point to another on the curve. The movement implies that the demand relationship remains consistent. Therefore, a movement along the demand curve will occur when the price of the good changes and the quantity demanded changes in accordance to the original demand relationship. In other words, a movement occurs when a change in the quantity demanded is caused only by a change in price, and vice versa.

Shifts

shift in a demand or supply curve occurs when a good''s quantity demanded or supplied changes even though price remains the same. For instance, if the price for a bottle of beer was $2 and the quantity of beer demanded increased from Q1 to Q2, then there would be a shift in the demand for beer. Shifts in the demand curve imply that the original demand relationship has changed, meaning that quantity demand is affected by a factor other than price. A shift in the demand relationship would occur if, for instance, beer suddenly became the only type of alcohol available for consumption.

Help

http://www.investopedia.com/university/economics/economics2.asp
http://www.investopedia.com/university/economics/economics3.asp

Subsidies

Opposite of tax
Government spending

Competitive Market

Where there are sufficiently large numbers of buyers and sellers, such that no trader has influence on price

Demand
Affect/Determinents

Relationship between consumer choice

Price of good/service
Buyers income
Buyes prefrences/taste
Price of substitutes Expectations of future costs
Tax/Subsidies
# of buyers in group

Supply
Affects/Determinents

The amount sellers are willing to produce at a given price

Price of inputs
Technology
Price of good/service

Other things Constant

Assumes technology, price of inputs, expectations, tax/policies, and # of sellers do not change.



Front		Back
Tradeoffs pg.9		Sacrificing one thing to have an other conflicting goods/services
Marginal cost pg.5		Added expenses beyond that of another tradeoff
Positive vs. Normative Economics pg. 10		Positive economics deals with how the market is, theory developement, cause and effect realationships, What the economy is actually like. Normative economics deals with value judgments of what the economy should be, the desirability of certain economic aspects.
Oppurtunity Cost pg. 27		The amount of other products that must be forgone or sacrificed to obtain 1unit of a specific good
Production Possibilities Curve (PPC) pg. 26		Each point represents the maximum combination of two products More of one means fewer of another Points inside are attainable ponits outside are not
Economics		livelyhood of people seeking/fufilment of utility
Consumers		Factors and Holdings private ownership rights (title) to resources Hold private information about ownership preference i.e. likes/dislikes, wants, needs Maximize utility
Marginal Benefit pg.5		Added benefits (utility)
Allocation of resources		How much of the resource goes into fufulling CC.
Consumption Choice		Favorable Combination
Producers		Factors and Holdings Look to maximize profits Hold/Know information about production and ability to implement(Produce)
Economic Principle		People are rational Tradeofss People are self interested Rational people weight benefits vs. cost MB>MC Cost---sacrifice of having a thing rational people think at the margin People rrespond to incentives
Free Enterprise Market		Decentralized market
		ppc curve
Capital Market		Global market with no restriction, i.e. Wall street
Collateriezd debt obligation		Lumping debts together(from seperate sources) Investor is backed by a more deversifed claim housing bubble
Economic orginization		A system and its effect on production/efficiency rooted in oppurtunity choice
Adam Smith		"Wealth of nations" laissez-faire----Free market Economic freedom, brings extra wealth
Economics		Social science concerned with the efficient use of scarce resources the discipline that studies how people allocate scarce resources among alternatives, to maximize utility
Substitutes		replacable goods/services
Compliments		A good/service that goes with another
Law of Demand		Refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship.
Economic Problem		How people allocate scarce resouces among alternatives to attain most utility
Law of Supply		Represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price.
Demand curve
Supply Curve
Circular Flow Model
Movements		A movement refers to a change along a curve. On the demand curve, a movement denotes a change in both price and quantity demanded from one point to another on the curve. The movement implies that the demand relationship remains consistent. Therefore, a movement along the demand curve will occur when the price of the good changes and the quantity demanded changes in accordance to the original demand relationship. In other words, a movement occurs when a change in the quantity demanded is caused only by a change in price, and vice versa.
Shifts		shift in a demand or supply curve occurs when a good''s quantity demanded or supplied changes even though price remains the same. For instance, if the price for a bottle of beer was $2 and the quantity of beer demanded increased from Q1 to Q2, then there would be a shift in the demand for beer. Shifts in the demand curve imply that the original demand relationship has changed, meaning that quantity demand is affected by a factor other than price. A shift in the demand relationship would occur if, for instance, beer suddenly became the only type of alcohol available for consumption.
Help		http://www.investopedia.com/university/economics/economics2.asp http://www.investopedia.com/university/economics/economics3.asp
Subsidies		Opposite of tax Government spending
Competitive Market		Where there are sufficiently large numbers of buyers and sellers, such that no trader has influence on price
Demand Affect/Determinents		Relationship between consumer choice Price of good/service Buyers income Buyes prefrences/taste Price of substitutes Expectations of future costs Tax/Subsidies # of buyers in group
Supply Affects/Determinents		The amount sellers are willing to produce at a given price Price of inputs Technology Price of good/service
Other things Constant		Assumes technology, price of inputs, expectations, tax/policies, and # of sellers do not change.



	x of y cards