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Solutions for Chapter 2: Economic Systems and Economic Tools

Full solutions for Contemporary Economics | 2nd Edition

ISBN: 9780538444958

Solutions for Chapter 2: Economic Systems and Economic Tools

Solutions for Chapter 2
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Textbook: Contemporary Economics
Edition: 2
Author: William A. McEachern
ISBN: 9780538444958

Contemporary Economics was written by and is associated to the ISBN: 9780538444958. Chapter 2: Economic Systems and Economic Tools includes 31 full step-by-step solutions. Since 31 problems in chapter 2: Economic Systems and Economic Tools have been answered, more than 4935 students have viewed full step-by-step solutions from this chapter. This textbook survival guide was created for the textbook: Contemporary Economics, edition: 2. This expansive textbook survival guide covers the following chapters and their solutions.

Key Business Terms and definitions covered in this textbook
  • balanced trade

    a situation in which exports equal imports

  • budget constraint

    the limit on the consumption bundles that a consumer can afford

  • business cycle

    fluctuations in economic activity, such as employment and production

  • common resources

    goods that are rival in consumption but not excludable

  • compensating differential

    a difference in wages that arises to offset the nonmonetary characteristics of different jobs

  • cyclical unemployment

    the deviation of unemployment from its natural rate

  • deadweight loss

    the fall in total surplus that results from a market distortion, such as a tax

  • explicit costs

    input costs that require an outlay of money by the firm

  • lump-sum tax

    a tax that is the same amount for every person

  • marginal tax rate

    the amount that taxes increase from an additional dollar of income

  • market power

    the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices

  • natural level of output

    the production of goods and services that an economy achieves in the long run when unemployment is at its normal rate

  • positive statements

    claims that attempt to describe the world as it is

  • producer surplus

    the amount a seller is paid for a good minus the seller’s cost of providing it

  • property rights

    the ability of an individual to own and exercise control over scarce resources

  • proportional tax

    a tax for which highincome and low-income taxpayers pay the same fraction of income

  • real exchange rate

    the rate at which a person can trade the goods and services of one country for the goods and services of another

  • substitutes

    two goods for which an increase in the price of one leads to an increase in the demand for the other

  • Tragedy of the Commons

    a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole

  • variable costs

    costs that vary with the quantity of output produced

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