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Solutions for Chapter 8: A Perfectly Competitive Market

Full solutions for Economics New Ways of Thinking | 1st Edition

ISBN: 9780821934012

Solutions for Chapter 8: A Perfectly Competitive Market

Economics New Ways of Thinking was written by and is associated to the ISBN: 9780821934012. Chapter 8: A Perfectly Competitive Market includes 11 full step-by-step solutions. Since 11 problems in chapter 8: A Perfectly Competitive Market have been answered, more than 1127 students have viewed full step-by-step solutions from this chapter. This textbook survival guide was created for the textbook: Economics New Ways of Thinking, edition: 1. This expansive textbook survival guide covers the following chapters and their solutions.

Key Business Terms and definitions covered in this textbook
  • business cycle

    fluctuations in economic activity, such as employment and production

  • crowding-out effect

    the offset in aggregate demand that results when expansionary fiscal policy raises the interest rate and thereby reduces investment spending

  • explicit costs

    input costs that require an outlay of money by the firm

  • gross domestic product (GDP)

    the market value of all final goods and services produced within a country in a given period of time

  • law of demand

    the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises

  • law of supply and demand

    the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance

  • marginal change

    a small incremental adjustment to a plan of action

  • marginal tax rate

    the amount that taxes increase from an additional dollar of income

  • market failure

    a situation in which a market left on its own fails to allocate resources efficiently

  • market failure

    a situation in which a market left on its own fails to allocate resources efficiently

  • multiplier effect

    the additional shifts in aggregate demand that result when expansionary fiscal policy increases income and thereby increases consumer spending

  • nominal variables

    variables measured in monetary units

  • normative statements

    claims that attempt to prescribe how the world should be

  • poverty line

    an absolute level of income set by the federal government for each family size below which a family is deemed to be in poverty

  • production possibilities frontier

    a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology

  • rational expectations

    the theory that people optimally use all the information they have, including information about government policies, when forecasting the future

  • sacrifice ratio

    the number of percentage points of annual output lost in the process of reducing inflation by 1 percentage point

  • store of value

    an item that people can use to transfer purchasing power from the present to the future

  • utilitarianism

    the political philosophy according to which the government should choose policies to maximize the total utility of everyone in society

  • utility

    a measure of happiness or satisfaction

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