Exam (elaborations)
ECO2013 (1)
- Course
- Macro Hammock
- Institution
- Macro Hammock
Exam of 5 pages for the course Macro Hammock at Macro Hammock (ECO2013 (1))
[Show more]
Seller
Follow
Content preview
ECO2013Scarcity - ANS-Things/stuff is limited/finite.
Choice - ANS-We have to choose somethings because we cannot choose everything.
Opportunity cost - ANS-The value of the best thing given up.
Rational Self-interest - ANS-It is a useful assumption and often true.
Positive Economics - ANS--"The way the world is"
-Correlation
Negative Economics - ANS-"The way the world ought to be"
-Causation
Simple Trade - ANS-Voluntary Exchange creates value
Production Possibilities Frontiers - ANS-Is a curve depicting all maximum output possibilities for
two goods, given a set of inputs consisting of resources and other factors.
The Law of Demand - ANS-As the price of a good rises, the quantity demanded falls.
The Law of Supply - ANS-As price rises, the quantity supplied rises.
Change in Demand - ANS-A shift in the demand curve.
Change in quantity demanded - ANS-Movement along the curve.
Things that can shift demand: - ANS-Changes in product quality (or information), changes in
income, changes in prices of substitutes and/or complements, natural disasters, changes in
expectations, changes in tastes and preferences, changes in demographics (i.e. population)
Change in supply - ANS-Is caused by one of the other factors affecting supply, and is
represented by a shift to a new supply curve.
Change in quantity supplied - ANS-Is caused by a change in price, and is represented by
movement along the supply curve.
Things that can shift supply: - ANS-Changes in input prices (i.e. labor, capital, land,
resources...), Taxes & Regulation & Subsidies, Entry or exit of firms, changes in technology,
changes in expectations and information, acts of nature/war etc.
, What if both curves move? - ANS-Consumer and Producer Surplus
Total surplus - ANS-Consumer surplus (+) Producer surplus
Price Controls - ANS-Government-imposed restrictions on market prices.
Price Ceilings - ANS-A maximum legal (allowed) price.
Price Floors - ANS-A minimum legal (allowed) price.
Shortage - ANS-Binding price ceilings create shortages.
Surplus - ANS-Binding price floors create surpluses.
Deadweight Loss - ANS-Lost consumer and producer surplus. *Inefficiency*
Elasticity of Supply and Elasticity of Demand Taxes - ANS-1) The burden of a tax is the
deadweight loss.
2) The burden of a tax is not determined by the legal assignment.
3) The burden of a tax is determined by the relative elasticities of supply and demand.
Market Failure - ANS-People pursuing their self-interests lends to an outcome the is collectively
irrational or inefficient.
Monopoly - ANS-There is only one producer/seller or a product
Public Goods - ANS-Nonrival- My consumption doesn't reduce the amount available to you.
Nonexcludable- People who don't pay cannot be stopped from consuming the good. Ex:
National Defense
Externalities, positive & negative - ANS-Occur when one person's actions affect a third party.
The Tragedy of the Commons - ANS-Every individual tries to reap the greatest benefit from a
given resource. When a resource is unknown, or owned in common, it tends t be overused. (i.e.
Public Bathrooms, Fisheries, common grazing fields, etc.)
The Tragedy of the Anticommons - ANS-Occurs when there are too many people with the power
to say "no" to the use of a resource. (i.e. Patent trolls & patent thickets, Russian Shopping
malls)
Information Problems - ANS-When one party to a transaction has trouble finding the truth. (i.e.
Used car sales, Education Signaling)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller lydiaomutho. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for CA$11.60. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now