ReviewSheet_Summary_Ch1-14 - PRINCIPLES OF MACROECONOMICS...

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PRINCIPLES OF MACROECONOMICSLUBA KETSLERFINAL EXAM – COMPREHENSIVE, COVERING CHAPTERS 1 THROUGH 14REVIEW SHEETCHAPTER 1TRY TO FOCUS ON UNDERSTANDING THE FUNDAMENTAL ECONOMICCONCEPTS:oSCARCITY – resources, time, land, labor, capital, economics is the study ofscarcityoOPPORTUNITY COST – the best alternative that we forgo or give upoSUNK COSTS – is not measured in the equation, what you put in and do notreceive in returnoMARGINALISM – with each additional unitoEFFICIENCY – 2 ways, in econ you want to be allocable efficient, what peoplewant at the lowest possible price, producing efficiently on the PPF, in a freemarket profit is eliminated almost instantaneouslyoEQUITY – a fancy word for being fairCHAPTER 2THE ECONOMIC PROBLEM: WHAT GETS PRODUCED? HOW IS IT PRODUCED?WHO GETS IT? GIVEN SCARCE RESOURCES, HOW EXACTLY DO LARGE,COMPLEX SOCIETIES GO ABOUT ANSWERING THESE THREE BASICQUESTIONS?
TO ATTAIN? HOW DOES TECHNOLOGY PLAY A ROLE IN THIS?
CHAPTER 3 – THIS CHAPTER IS SPLIT BETWEEN UNDERSTANDING DEMAND &SUPPLYUNDERSTAND THE CIRCULAR FLOW OF ECONOMIC ACTIVITY
KNOW THE FACTORS OF PRODUCTION: LAND, LABOR, CAPITALDEMANDCHANGES IN QUANTITY DEMANDED VS. CHANGES IN DEMANDoQUANTITY DEMANDED: REFERS TO A CHANGE IN PRICE, LEADS TO AMOVEMENT ALONG THE CURVEoCHANGES IN DEMAND: CHANGES IN ANY OTHER FACTOR SUCH ASINCOME, PREFERENCES, LEADS TO A SHIFT OF THE DEMAND CURVEKNOW THE LAW OF DEMAND:NEGATIVE RELATIONSHIP BETWEEN PRICE ANDQUANTITY DEMANDED.AS PRICE RISES, QUANTITY DEMANDED DECREASES,AND VISA-VERSA.KNOW THE SHAPE OF THE DEMAND CURVE, UNDERSTAND WHAT IT MEANS TODERIVE A MARKET DEMAND CURVE: MEANS THAT YOU ADD UP INDIVIDUALDEMAND CURVESUNDERSTAND THE DIFFERENCE BETWEENoINCOME – a flow measureoWEALTH – the accumulation of income over timeKNOW THE TERMS: NORMAL GOOD, INFERIOR GOODS, SUBSTITUTES,COMPLIMENTSSUPPLYCHANGES IN QUANTITY SUPPLIED VS. CHANGES IN SUPPLYoQUANTITY SUPPLIED: REFERS TO A CHANGE IN, LEADS TO A MOVEMENTALONG THE CURVEoCHANGES IN SUPPLY: BROUGHT ABOUT BY CHANGES IN THE ORIGINALCONDITIONS, LEADS TO A SHIFT OF THE SUPPLY CURVEKNOW THE LAW OF SUPPLY:POSITIVE RELATIONSHIP BETWEEN PRICE ANDQUANTIY OFGOODS SUPPLIED. AN INCREASE IN MARKET PRICE WILL LEAD TO

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Term
Spring
Professor
KETSLER

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