Solutions for Chapter 3: Making Economic Decisions

Full solutions for Explorations in Economics | 1st Edition

ISBN: 9780716701071

Solutions for Chapter 3: Making Economic Decisions

Chapter 3: Making Economic Decisions includes 10 full step-by-step solutions. Since 10 problems in chapter 3: Making Economic Decisions have been answered, more than 927 students have viewed full step-by-step solutions from this chapter. Explorations in Economics was written by and is associated to the ISBN: 9780716701071. This expansive textbook survival guide covers the following chapters and their solutions. This textbook survival guide was created for the textbook: Explorations in Economics, edition: 1.

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

    fluctuations in economic activity, such as employment and production

  • discrimination

    the offering of different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics

  • externality

    the uncompensated impact of one person’s actions on the wellbeing of a bystander

  • indifference curve

    a curve that shows consumption bundles that give the consumer the same level of satisfaction

  • labor-force participation rate

    the percentage of the adult population that is in the labor force

  • life cycle

    the regular pattern of income variation over a person’s life

  • lump-sum tax

    a tax that is the same amount for every person

  • marginal rate of substitution

    the rate at which a consumer is willing to trade one good for another

  • market economy

    an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

  • market risk

    isk that affects all companies in the stock market

  • medium of exchange

    an item that buyers give to sellers when they want to purchase goods and services

  • model of aggregate demand and aggregate supply

    the model that most economists use to explain shortrun fluctuations in economic activity around its long-run trend

  • monetary neutrality

    the proposition that changes in the money supply do not affect real variables

  • present value

    the amount of money today that would be needed, using prevailing interest rates, to produce a given future amount of money

  • price floor

    a legal minimum on the price at which a good can be sold

  • property rights

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

  • random walk

    the path of a variable whose changes are impossible to predict

  • surplus

    a situation in which quantity supplied is greater than quantity demanded

  • tariff

    tax on goods produced abroad and sold domestically

  • welfare

    government programs that supplement the incomes of the needy

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