MACRO UNIT 1 TEST

the producer with the lowest opportunity cost (who loses less)

the producer that can produce the most output or requires the lease amount of inputs (resources)

there is a relationship between price and quantity demanded

there is a direct (or positive) relationship between price and quantity supplied

1. prices/availability of inputs (resources or production) 2) Number of sellers 3) Technology (will always cause a shift to the right) 4) Government action: taxes and subsidies 5) Expectations of future profit

1. Tastes and preferences 2) Number of consumers 3) The price of related goods 4) Income 5) Future expectations

a government payment to a business or marker. Subsidies cause the supply of a good to increase

Shifters change the curve, quality and price moves up and down the curve

demand is more than supply (raise price)

more supply than demand (lower price)

point where supply and demand cross

what you give up/lose after a decision

short in supply

small scale, looking at small businesses

big scale, looking at whole economy of country

Is making decisions based on increments (increase)

cost added by producing one unit

based on facts, avoids values judgments (what is) vs all judgments and personal opinions (what ought to be)

a measure of satisfaction

land, labor, captial, entrepreneurship

1. Promote economic growth 2) Limit unemployment 3) Keep prices stable (limit inflation)

1. goods inside final goods 2) Non production transactions 3) illegal activities

Consumption + I or total spending +Government spending +(X or exports - M or imports)

when a company puts money into itself to immprove it

GDP measured in current prices of year (no inflation) vs GDP adjusted for inflation

people who are willing to work, not in schools, at least 16, not in military (#unemployed/ #in labor force * 100)

demonstrates how money moves from producers to households and back again in an endless loop

rising of prices each year (new #- old #/ old# x 100)

decrease in general prices or negative inflation rate

prices increasing at slower rates

items that consumers would normally purchase (Price of market basket/ price of market basket in base year times 100)

1. Substitution Bias (when prices go up we buy subsitutes) 2) New products arent included 3) Product quality- increase or decrease

Frictional plus structural unemployment. The amount of unemployment that exists when the economy is healthy and growing

measures the prices of all goods producer (Domestic ONLY, not Imported goods)

shows the economy going up and down