Advanced level economics

30/04/2021

19/03/2021

Property

12/12/2020

We'll all be dead in the long run, do we have kyneesians around please explain this

12/12/2020

Economists does not get employed but rather they create employment!

09/06/2020

Earn - Receive payment (income) for productive efforts.

Economic growth - An increase in the total output of a nation over time. Economic growth is usually measured as the annual rate of increase in a nation's real GDP.

Economic system - The collection of institutions, laws, activities, controlling values, and human motivations that collectively provide a framework for economic decision making.

Economic wants - Desires that can be satisfied by consuming a good or a service. Some economic wants range from things needed for survival to things that are nice to have.

Entrepreneur - One who organizes, manages, and assumes the risks of a business or enterprise.

Entrepreneurship - The human resource that assumes the risk of organizing other productive resources to produce goods and services.

Equilibrium price - The market clearing price at which the quantity demanded by buyers equals the quantity supplied by sellers.

Exchange - Trading goods and services with others for other goods and services or for money (also called trade). When people exchange voluntarily, they expect to be better off as a result.

Exchange rates - The rate, or price, at which one country's currency is exchanged for the currency of another country.

Excise Tax - Taxes imposed on specific goods and services, such as ci******es and gasoline.

Exports - Goods or services produced in one nation but sold to buyers in another nation.

Factors of production - Resources used by businesses to produce goods and services.

Federal Reserve System - The central bank and monetary authority of the United States.

09/06/2020

Costs of production - All resources used in producing goods and services, for which owners receive payments.

Craftsperson - A worker who completes all steps in the production of a good or service.

Credit - (1) In monetary theory, the use of someone else's funds in exchange for a promise to pay (usually with interest) at a later date. The major examples are short-term loans from a bank, credit extended by suppliers, and commercial paper. (2) In balance-of-payments accounting, an item such as exports that earns a country foreign currency.

Criteria - Standards or measures of value that people use to evaluate what is most important.

Decision making - Choosing from alternatives the one with the greatest benefit net of costs.

Deflation - A sustained and continuous decrease in the general price level.

Demand - A schedule of how much consumers are willing and able to buy at all possible prices during some time period.

Demand decrease - A decrease in the quantity demanded at every price; a shift to the left of the demand curve.

Demand increase - An increase in the quantity demanded at every price; a shift to the right of the demand curve.

Determinants of demand - Factors that influence consumer purchases of goods, services, or resources.

Determinants of supply - Factors that influence producer decisions about goods, services, or resources.

Distribution - The manner in which total output and income is distributed among individuals or factors (e.g., the distribution of income between labor and capital).

Division of labor - The process whereby workers perform only a single or a very few steps of a major production task (as when working on an assembly line.)

Durables - Consumer goods expected to last longer than three years.

Earn - Receive payment (income) for productive efforts.

09/06/2020

Collateral - Anything of value that is acceptable to a lender to guarantee repayment of a loan.

Command economy - A mode of economic organization in which the key economic functions--what, how, and for whom--are principally determined by government directive. Sometimes called a centrally planned economy.

Comparative advantage - The principle of comparative advantage states that a country will specialize in the production of goods in which it has a lower opportunity cost than other countries.

Competition - The effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms.

Complements - Products that are used with one another such as hamburger and hamburger buns

Consumers - People whose wants are satisfied by consuming a good or a service.

Consumption - In macroeconomics, the total spending, by individuals or a nation, on consumer goods during a given period. Strictly speaking, consumption should apply only to those goods totally used, enjoyed, or eaten up within that period. In practice, consumption expenditures include all consumer goods bought, many of which last well beyond the period in question --e.g., furniture, clothing, and automobiles.

Consumer spending - The purchase of consumer goods and services.

Corporation - A legal entity owned by stockholders whose liability is limited to the value of their stock.

09/06/2020

produce something with fewer resources than other producers would use to produce the same thing

Alternatives - Options among which to make choices.

Balance of trade - The part of a nation's balance of payments that deals with merchandise (or visible) imports or exports.

Bank, commercial - A financial institution accepts checking deposits, holds savings, sells traveler's checks and performs other financial services.

Barter - The direct trading of goods and services without the use of money.

Benefit - The gain received from voluntary exchange.

Bond - A certificate reflecting a firm's promise to pay the holder a periodic interest payment until the date of maturity and a fixed sum of money on the designated maturity date.

Business (firm) - Private profit-seeking organizations that use resources to produce goods and services.

Capital - All buildings, equipment and human skills used to produce goods and services.

Capital resources - Goods made by people and used to produce other goods and services. Examples include buildings, equipment, and machinery.

Choice - What someone must make when faced with two or more alternative uses of a resource (also called economic choice).

Circular flow of goods and services (or Circular flow of economic activity) - A model of an economy showing the interactions between households and business firms as they exchange goods and services and resources in markets.

09/06/2020

Backward bending labor curve

In economics, a backward-bending supply curve of labour or backward-bending labour supply curve is a graphical device showing a situation in which, as real or inflation-corrected wages increase beyond a certain level, people will substitute leisure (non-paid time) for paid work-time and thus higher wages lead to less labor-time being offered for sale.

The labour-leisure tradeoff is the tradeoff faced by wage-earning human beings between the amount of time spent engaged in wage-paying work (assumed to be unpleasant) and satisfaction-generating non-paid time that allows (1) participation in leisure activities and (2) use of time to do necessary self-maintenance, such as sleep. The key to this tradeoff is a comparison between the wage received from each hour of working and the amount of satisfaction generated by use of non-paid time. Such a comparison generally means that a higher wage entices people to spend more time working for pay; this substitution effect implies a positively sloped labour supply curve. However, the backward-bending labour supply curve results when an even higher wage actually entices people to work less and to consume more leisure or non-paid time

09/06/2020

Marginal productivity Theory of Distribution

The marginal productivity theory of distribution determines the prices of factors of production. This theory states that a factor of production is paid price equal to its marginal product. For example a labourer gets his wage according its marginal product. He is rewarded on the basis of contribution he makes the total output.

Marginal productivity theory of wages

Marginal productivity theory of wage explains that under perfect competition a worker's wage is equal to marginal as well as average revenue productivity. In other words marginal revenue productivity and average revenue productivity (ARP) of a worker determine his wages. According to this theory wage of a laborer is determined by his marginal productivity. In other words MRP= M.W. Marginal productivity is the addition made total productivity by employing one more unit of are labours. As the labourers are given money wage their marginal productivity is calculated in terms of money.

09/06/2020

Marginal productivity

The term ¡°marginal productivity¡± refers to the extra output gained by adding one unit of labour; all other inputs are held constant. So, the technology and efficiency of the factory stays the same. Marginal productivity is the extra jeans sewn, that is output gained, by hiring an extra worker, for example.

marginal revenue product/MRP

The change in revenue that results from the addition of one extra unit when all other factors are kept equal. The marginal revenue product is used in marginal analysis to examine the effect of variable inputs, such as labor, and follows the law of diminishing marginal returns. As the number of units of a variable input increase, the revenue generated by each addition unit decreases at a certain point. It is calculated by taking the marginal product of labor and multiplying it by the marginal revenue of a firm.

Marginal revenue product = marginal product x marginal revenue