Exam1 - Flashcards2 - to produce it Assumptions Assumptions...

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Equity Efficiency
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Trade-off that refers to the size of the economic pie. Trade-off that refers to how the economic pie is divided.
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Financial Accounting Management Accounting
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Primarily provides information for internal users (i.e. managers within a firm). Primarily provides information for external users (i.e. individuals, investors and creditors, taxing authorities, and the government).
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Guns and Butter “No such thing as a free lunch”
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To get something we like, we usually have to give up another thing we like; adage. Used to represent the classic societal tradeoff between spending on national defense and consumer goods.
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Marginal Change Lost Wages
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The largest single cost of going to college. A small incremental adjustment.
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Price Market Activity
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An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services. Reflect both the value of a product to consumers and the cost of the resources used
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Unformatted text preview: to produce it Assumptions Assumptions The art of scientific thinking is deciding which ____ to make. The foundation stones from which economic models are built. Supply and Demand Comparative Advantage The basis for gains from specialization and trade. Forces that make market economies work. Elastic Inelastic Points with a low price and a high quantity. Points with a high price and a low quantity. Inelastic Demand Curve Elasticity Used to analyze supply and demand with greater precision. Price and total revenue go in the same direction. Increases, then Decreases Elastic Demand Curve Price and total revenue go in opposite directions. How total revenue changes as one moves down a linear demand curve. Time Unit Elastic The change in the price of a good results in no change in total revenue. The main determinant of the price elasticity of supply. Less Elastic A tax burden falls more heavily on this side of the market....
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