Macro 1010 Exam 1 StudyGuide
Macro 1010 Exam 1 StudyGuide Econ 1010
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This 7 page Study Guide was uploaded by Caroline meacham on Wednesday September 9, 2015. The Study Guide belongs to Econ 1010 at University of Tennessee - Chattanooga taught by John Barnes in Summer 2015. Since its upload, it has received 303 views. For similar materials see Principles of Economics: Macroeconomics in Economcs at University of Tennessee - Chattanooga.
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Date Created: 09/09/15
Macroeconomics Exam 1 Study guide As a disclaimer this is not meant to provide you with the exact material terms or ideas that will be on the test Your own notes and the textbook should also be reviewed Terms utility scarcity other things equal assumption budgetHne slope law of demand PPC Law of increasing opportunity costs aggregates GDP postive economics normative economics opportunity cost pure capitalism capitalistic based market freedom of enterprise freedom of choice reasonable trade belt noncash wage rent inventory durable and non services interest informalformal market market equilibrium normalinferior good complements substitutes price ceilingfloor freeriders negativepostitive externality updownstream cost publicprivate quasi public goods rivalry fiscal and monetary policy principalagent problems unfunded liability deficit 1 l A m 4 4 4444 4 4 4 44 4 ii Wde H 03 NJ 5 hccm kasuh D 39ch Winn Wm 1 180 C 39id d f 39 39 399 X 9 S gnum WW 39 39 50 0 39 0 So 3304 So 00 00 b Ofc Loo 150 139 JW 3 4 30 00 6 mccmz W 00 i 350 quot00 50 M Mo 35quot quot i am yes 09 Z we consume mm Mm J g x V 55 a x 6 v u Wmimt 1m 55 quot L fgt il fajiLrLuj JP E w Litt P A g 39 mmww f 1 pram 1quot 7 7 i5 anneal a w U a I Fr Elm JELJE 91p E f f d wmatm mi y i 39 w 1 1 E1 7 w A r Emma f w r r f E J Eh Ei r What are the assumed GDP conditions 5 no international trade fixed resources productive efficiency fixed technology full employment What are the factors of economic growth 4 Increase in resource supplied Improvement in resource quality Technological advances international trade What 2 questions are asked to determine what kind of economic system is in place Who owns the factors of production How is economic activity controlled and determined What are the characteristics of a capitalistic market based system 9 develop private property freedom of enterprise and choice market competition use of money use of a market system active but limited government specialization decisions made in self interest technology and capital formation What are the goals of a capitalistic market based system 6 economic growth full employment price stability economic security reasonable trade belts economic efficiency What are the nonprice factors that shift the demand curve5 changes in the number of buyers changes in customer expectation changes in customer preference changes in income changes in price of related goods What are the nonprice factors that shift the supply curve 6 change in number of sellers changes in expectations changes in price of good related in production changes in technology changesininputpnce changes in taxationsubsidies SellersExpectationsPreferenceTechlnputTaxation Which markets have government intervention3 labor agriculture utilities Why do governments fail 6 size and scope paperwork accountability mangament bureaucracy aggregation of information o is not self limiting or correcting SizePaperworkAccountabilityManagementBureaucracyAggregationNot selflimiting Positive externality situation People buy flu shots acquisition cost This generates benefit for those who get them which was intended and those who do not get them the free riders People are not getting sick as a result of the people who got shots the downstream benefit Can be corrected by subsidies to consumerproducers Negative externality situation We pay for the gas at the pump acquisition cost The gas emits pollution that harms our environment downstream cost By the price not reflecting the detriments to society the consumers are ultimately benefiting monetary wise freeriders Can be corrected by taxing producers Price restrictions o ceilings create shortages demand is greater than supply leads to decline in product quality and 2nd handblackmarkets floors create surpluses the supply exceeds the demand Point to remember Price must be set below the ceiling and above the floor Equilibrium point is where MCMB where supply intersects demand Marginal benefit curve is also known as the Demand curve Marginal cost curve is also known as the Supply curve What are the differences between a change in quantity demanded and a shift in the demand curve The change is Q demanded is due to a change in price a movement along a fixed demand curve How are publicprivate goods classified private rival and excludable the candy bar you ate last night public nonrival and nonexcludable national defense What s the relationship between income and inferiornormal goods income and inferior goods are inversely related the more salary you earn the less you will want to buy ramen noodles income and normal goods are directly related the more salary you earn the more you will want to have steak dinners
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