Macro Economics Notes - Chapters 1 & 2

False (B)

Scarcity means resources are limited relative to wants. This leads to competition because individuals and businesses must strive to acquire the scarce resources to satisfy their needs and desires. They compete by offering better prices, higher quality, or more efficient methods.

<p>opportunity cost</p> Signup and view all the answers

<p>Resources = Inputs used in the production process, including land, labor, capital, and entrepreneurship Scarcity = The fundamental economic problem that arises when wants exceed available resources Opportunity Cost = The value of the next best alternative forgone when making a choice Marginal Analysis = The process of comparing the additional benefits and costs of a decision Efficiency = A state where resources are allocated to produce the maximum possible output and minimize waste</p> Signup and view all the answers

<p>Unemployment caused by normal labor turnover and the time it takes for workers to find new jobs. (C)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Real income = (Nominal income / CPI) * 100</p> Signup and view all the answers

<p>cyclical</p> Signup and view all the answers

<p>Frictional Unemployment = Unemployment caused by normal labor turnover and the time it takes for workers to find new jobs. Structural Unemployment = Unemployment caused by a mismatch between the skills of workers and the requirements of available jobs. Cyclical Unemployment = Unemployment caused by a decline in overall economic activity.</p> Signup and view all the answers

<p>Change in the price of the good itself (C)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>A normal good is a good whose demand increases as income rises, while an inferior good is a good whose demand decreases as income rises.</p> Signup and view all the answers

<p>Consumer Price Index (CPI)</p> Signup and view all the answers

<p>Rent control (D)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>A change in demand is a shift in the entire demand curve, caused by factors other than price. A change in quantity demanded is a movement along the demand curve, caused by a change in the price of the good.</p> Signup and view all the answers

<p>demanded</p> Signup and view all the answers

<p>A shop sells out of a popular product. = Shortage The government sets a minimum price for milk. = Price Floor A farmer produces more crops than the market can absorb. = Surplus Consumers are willing to pay more than the current market price of a good. = Consumer Surplus Producers are able to sell their goods at a higher price than their minimum selling price. = Producer Surplus</p> Signup and view all the answers

Inputs used to produce goods and services: land, labor, capital, entrepreneurship.

Limited resources lead to the necessity of making choices.

The value of the next best alternative forgone when making a decision.

Marginal Benefits (MB) are the additional gains from an action, while Marginal Costs (MC) are the additional costs incurred.

A situation where Marginal Benefits equal Marginal Costs, maximizing resource use.

Dollar amount of income received without adjustments.

Nominal income adjusted for inflation or price changes.

Percentage of the civilian labor force that is not employed.

Unemployment due to transitions in the labor market.

Unemployment arising from frictional and structural factors.

The study of what should be in economics.

The study of what is in economics, based on factual statements.

Shows possible combinations of two goods produced with full resources.

Indicates constant opportunity costs in production.

Indicates increasing opportunity costs as production expands.

As more of a good is produced, its opportunity cost increases.

Maximum output is produced with given resources and technology.

Less than maximum output is produced with available resources.

The ability to produce more of a good using the same resources.

Ability to produce a good at a lower opportunity cost than others.

As price rises, quantity demanded falls, ceteris paribus.

A shift in the demand curve due to various factors other than price.

Demand increases as income rises.

Demand falls as income increases.

The difference between the maximum price consumers are willing to pay and the price they actually pay.