VICTORIA ROCA p7
Econ hhumans us scarce resour 2satis unlimwants LoD $↓, quant↑OCnext best opt Scarcity limt amou resour 2unlimwants.T@M oc@most speci GvsB ex.Of simpl PPF Prod Mrkt goods&services purch by households Factr Mrkt fop bought&sold 2firms Law↑$ any comp has maxed out its fop, prod +difficlt Laissez-fairetransact betwn priv partis r free frm govt-interf ProfitMotivmotivatn of firms to maximize profit. OpenOpporevery1 can compete inthe mrkt Legal=everyone can compete becau we have same rights PrivateProp right2control possessions VoluntaryExchangpeople can buy and sell what they want Firmsproducers Householdsconsumers SafetyNetcollection of services provided by the state or other institutions Welfareprovids financial aid2individ who cannot supprt themsel.
FiscalPolic govt adjusts spending levels&tax rates2monitr&influenc a nation's econ. MonetaryPolic monetar authori controls supply of $, targeting an inflation&interest rate2ensure price stabiliy&generl trust inthe currency. SubstiEffsubstitute product w/other w/cheaper price. IncomEff if product is2expensive, don't buy, if really want it, sacrifice somethin else. InferiorGoods something we have sacrificed Complementgoes along with something else Substituteschange4something similar&cheaper, still accomplish goal. Elasticitymeasurement of how responsive an econ variable is to a change in another. MarginalProduct of labor change in output that results from employing an added unit of labor.↑ Marginal returns variable ↑ as each additional unit of that resource is employed
↓ Marginal returns more of a variable is added to another resource, marginal product ↓ Subsidiesbenefit given by govt2groups/indiv in the form of a cash or tax Excise taxtaxes paid when purchases r made on a good. Regulationimposition of rules by govt, backed by penalties intended2modify the economic behaviour Equilibriumpoint where supply&demand r = Price ceiling govt-imposed price control/limit how high a price is charged4a product. Price floor how low a price is charged4a product. NaturalMonopolis rise when there are extremely high fixed costs of distribution, such as exist when large-scale infrastructure is required to ensure supply GovtMonopolisgovt corporation is sole provider of a particular good or service and competition is prohibited by law. Trustsfiduciary arrangemnt that allows 3rd party2hold assets on behalf of a beneficiary Circular flow models diagram used2represent monetary transactions in economy CFM of mixed econgovt buys land, labor, and capital from households in the factor market and purchase goods and services in the product market CFM free-market econ no govt interferance Mergerscombining many companies into1 2enhance financial&operational strengths of both organizations. Franchisesallow a party sell product or provide a service under the business's name. Supply shockevent that suddenly↑ or↓the supply of service, affecting equi$ Rationing artificial control on distribution of scarce resources BlackMrktprodcts illegally traded Unemployed persontemporarily w/out work. LearningEff ↑ education, higher wages Screening effect higher education, more efficient worker Outsourcingcontracting with another company to do a specific job Offshoringcompany's operation to another country (overseas) Commodity$objects have value in themselves Representative$ something that represents intent to pay the money (check) Fiat$ physical money (paper&coins). Backed by the government.