VCC Economics Test 1 Study Guide

VCC Economics Test 1 Study Guide - Macro Economics Test 1...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Macro Economics Test 1 Study Guide 74 questions on test Economics – deal with scarcity and choice. Micro-economics – economic analysis of the individual . Individual market, etc. Macro-economics – pure Keynesian economics. Deals primarily with aggregates. Aggregate expenditure model. Models, theories – abstracts. Do not bare resemblance to real life, real world, situations. Idealized situations. Keynesian economics – macro economics. Production – conversion of resources into consumer products. Labor and technology – considered to be substitute goods. Production possibility curve – depicts total possible outputs with two inputs. Demonstrates allocated efficiency. Next 3 linked together: Division of labor – leads to specialization. Specialization – specialization is comparative advantage. Comparative advantage – see specialization above. Absolute advantage – ability to produce a product or service at a lower opportunity cost compared to other producers. Inferior goods – second tier of goods. Not necessarily inferior in quality. “knock offs.” Not necessarily the name brand. Normative economics – Keynesian economics. Makes value judgments. Positive economics – classical or Austrian economics. Function of price on the market – organizes the market. Rations scarce goods. Steers resources into their most efficient or profitable use. Profit – drives the market. Price floor – the minimum/lowest price that can be charges. Price is above market price. Creates a surplus. Can only be established by the government. Price ceiling – below market price. Creates a
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/23/2010 for the course BUS ECO2013 taught by Professor during the Fall '09 term at Valencia.

Page1 / 2

VCC Economics Test 1 Study Guide - Macro Economics Test 1...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online