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Solutions for Chapter section 4 : National Income and Price Determination

Full solutions for Krugman's Economics for AP* | 2nd Edition

ISBN: 9781429218276

Solutions for Chapter section 4 : National Income and Price Determination

Solutions for Chapter section 4
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Textbook: Krugman's Economics for AP*
Edition: 2
Author: Margaret Ray, David A. Anderson
ISBN: 9781429218276

Chapter section 4 : National Income and Price Determination includes 25 full step-by-step solutions. This expansive textbook survival guide covers the following chapters and their solutions. Since 25 problems in chapter section 4 : National Income and Price Determination have been answered, more than 13143 students have viewed full step-by-step solutions from this chapter. This textbook survival guide was created for the textbook: Krugman's Economics for AP*, edition: 2. Krugman's Economics for AP* was written by and is associated to the ISBN: 9781429218276.

Key Business Terms and definitions covered in this textbook
  • automatic stabilizers

    changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action

  • budget deficit

    an excess of government spending over government receipts

  • budget deficit

    a shortfall of tax revenue from government spending

  • constant returns to scale

    the property whereby long-run average total cost stays the same as the quantity of output changes

  • demand curve

    a graph of the relationship between the price of a good and the quantity demanded

  • diseconomies of scal

    the property whereby long-run average total cost rises as the quantity of output increases

  • gross domestic product (GDP)

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

  • income elasticity of demand

    a measure of how much the quantity demanded of a good responds to a change in consumers’ income, computed as the percentage change in quantity demanded divided by the percentage change in income

  • marginal rate of substitution

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

  • 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

  • national saving

    the total income in the economy that remains after paying for consumption and government purchases

  • natural resources

    the inputs into the production of goods and services that are provided by nature, such as land, rivers, and mineral deposits

  • normal good

    a good for which, other things being equal, an increase in

  • principal

    a person for whom another person, called the agent, is performing some act

  • prisoners’ dilemma

    a particular “game” between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial

  • rational people

    people who systematically and purposefully do the best they can to achieve their objectives

  • supply shock

    an event that directly alters firms’ costs and prices, shifting the economy’s aggregate supply curve and thus the Phillips curve

  • tax incidence

    the manner in which the burden of a tax is shared among participants in a market

  • total revenue (in a market)

    the amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold

  • 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

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