Economics 105: Chapter 1-5
Economics 105: Chapter 1-5 eco 105
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This 2 page Bundle was uploaded by Destiny Notetaker on Tuesday September 29, 2015. The Bundle belongs to eco 105 at Pace University taught by Mark Weinstock in Fall 2015. Since its upload, it has received 30 views. For similar materials see Principles of Economics: Macroeconomics in Economcs at Pace University.
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Great notes!!! Thanks so much for doing this...
-Dr. Will Gislason
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Date Created: 09/29/15
09102015 Economics Chapter 2 amp 3 Mm possil3ilities curve a curve that shows the possible combinations of products that an economy can produce given that its productive resources are fully employed and ef ciently used marginal principle increase the level of an activity as long as its marginal bene t exceeds its marginal cost Choose the level at which the marginal bene t equals the marginal cost 0 marginal bene t the additional bene t resulting from a small increase I some activity marginal cost the additional cost resulting from a small increase in some activity Adam Smith three reasons for productivity to increase with specialization o Repetition the more times a worker performs a particular task th more pro cient the worker becomes at that task 0 Continuity a 0 Innovation mport a product produced in a foreign country and purchased by residents of the home country Export a product produced in the home country and sold in another country Market economy an economy in which people specialize and exchange goods and services in markets 0 Although it appears that markets arose naturally a number of social and gov t inventions have made them work better 0 Contracts specify the terms of exchange facilitating exchange between strangers 0 Insurance reduces the risk entrepreneurs face 0 Patents increase the pro tability of inventions encouraging rms to develop new products and production processes 0 Accounting rules provide potential investors with reliable information about the nancial performance of a rm 0 GDP Equation 0 Y C l G NX Where 0 Y GDP o C CONSUMPTION 0 I INVESTMENT 0 G GOVERNMENT PURCHASES 0 NX NET EXPORTS National income the total income earned by a nation s residents both domestically and abroad in the production of goods and services Gross national product GDP plus net income earned abroad pERSONAL INCOME INCOME INCLUDNG TRANSFER PAYMENTS RECEIEVED BY HOUSEHOLDS PERSONAL DISPOSABLE INCOME PERSONAL INCOME THAT HOUSEHOLDS RETAINING AFTER PAYING INCOME TAXES Valueadded the sum of all the income wages interest pro ts and rent generated by an organization 0 For a rm we can measure value added by the dollar value of the rms sales minus the dollar value of the goods and services purchased from other rms Labor force the total number of workers both the employed and the unemployed LABOR FORCE EMPLOYED UNEMPLOYED Unemployment rate the percentage of the labor force that is unemployed O UNEMPLOYMENT RATE Unemployed x 100 labor force Labor force participation rate the percentage of the population oven 16 years of age that is in the labor force Labor force participation rate labor force x 100 Population 16 years and older
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