Economics 40S Review1June 2013

Economics 40S Review Assignment

Choose two of the following concepts/terminology sections to cover. Explain the concept with 1) a description/definition of what it is and 2) provide two internet links for further explanation and 3) a video link and 4) a newspaper item depicting the concept. The information will be compiled onto a document that will be accessible for your study purposes.

You might find a relevant video at one of the following sites:

Economic Concepts/Terminology / Students
Economic Problem
Natural Resources
Capital Resources
Human Resources
Microeconomics
Macroeconomics
Variables
Independent Variable
Dependent Variable
Inverse Relationship
Direct Relationship
Ceteris Paribus
Positive Economics
Normative Economics
Utility
Self-Interest Motive
Opportunity Cost
Production Possibilities Schedule
Production Possibilities Curve
Law of Increasing Opportunity Costs
Economic Growth
Economics System
Traditional Economy
Market Economy
Product Market
Resource Market
Command Economy
Mixed Economy
Economic Efficiency
Demand Schedule
Demand Curve
Change in Quantity Demanded
Market Demand
Law of Demand
Demand Factors
  • Number of buyers
  • Income—normal products; inferior products
  • Prices of other products—substitute products; complementary products
  • Consumer preferences
  • Consumer expectations—changes in prices and their own incomes
Change in Demand
Supply
Quantity Supplied
Market Supply
Law of Supply
Supply Schedule
Supply Curve
Change in Quantity Supplied
Supply Factors
  • Number of producers
  • Resource prices
  • State of technology
  • Changes in nature
  • Prices of related products
  • Producer expectations
Change in Supply
Market Equilibrium
Effects of a Surplus
Effects of a Shortage
Law of Diminishing Marginal Utility
Price Elasticity of Demand
Elastic Demand
Inelastic Demand
Total Revenue
Factors Affecting Price Elasticity of Demand
  • Portion of Consumer Incomes
  • Access to Substitutes
  • Necessities Versus Luxuries
  • Time
Calculating Price Elasticity of Demand Formula
Price Elasticity of Supply
Elastic Supply
Inelastic Supply
Factors That Affect Price Elasticity of Supply
  • The Immediate Run
  • Perfectly Inelastic Supply
  • Short Run
  • Long Run
Constant-Cost Industry
Perfectly Elastic Supply
Increasing-Cost Industry
Calculating Price Elasticity of Supply Formula
Excise Tax
The Effect of Price Elasticity of Demand
The Effect of Price elasticity of Supply
The Role of Elasticity in Tax Policy
Price Control
  • Price Floor--examples
  • Price Ceiling—examples

Consumer Surplus
Marginal Benefit
Total Benefit
Producer Surplus
Perfect Competition
Deadweight Loss
Spillover Effects
Spillover Costs
Spillover Benefits
Public Good
Lorenz Curve
Reasons for Income Inequality: Wages
  • Labour Productivity
  • Education
  • Experience
  • Job Conditions
  • Regional Disparities (where you live)
  • Market Power (unions)
  • Discrimination
Reasons for Income Inequality: Other Incomes
  • Risk-Taking
  • Ability
  • Wealth

Poverty
Poverty Line
Occurrence of Poverty
  • Gender Household Type, and Age
  • Employment
  • Region
Debates over the Measurement of Poverty
Welfare Society
  • Transfer Payments and Income Equity
  • Universality
  • Means Testing
Impact on Income Distribution
Taxes and Income Equity
  • Benefits Received
  • Ability to Pay
Taxes and Income
  • Progressive Tax
  • Regressive Tax
  • Proportional Tax

National Income Accounts
Gross Domestic Product
Income Approach to GDP Calculation Components
  • Wages and Salaries
  • Corporate Profits
  • Interest Income
  • Proprietors’ Incomes and Rents
  • Indirect Taxes
  • Depreciation
Expenditure Approach to GDP Calculation Components
  • Personal Consumption—Nondurable and durable goods
  • Gross Investment
  • Government Purchases
  • Net Exports
  • C + I + G + X
GDP Identity
Statistical Discrepancy
Final Products
Intermediate Products
Double Counting
Value Added
Per Capita GDP
Real GDP
Limitations of GDP
  • Excluded Activities
  • Nonmarket activities
  • Underground economy
  • Product Quality
  • Composition of Output
  • Income Distribution
  • Leisure
  • The Environment
  • Disposable Income

Deflation
Hyperinflation
Consumer Price Index
Item Weights
Base Year
Cost of Living
Nominal Versus Real Income
  • Nominal Income
  • Real Income
Limitations of the CPI
  • Consumer Differences
  • Changes in Spending Patterns
  • Product Quality and New Products

GDP Deflator
Nominal GDP
Nominal Versus Real GDP Formula
Real GDP = Nominal GDP/GDP deflator
Inflation’s Effects
  • Cost of Living Adjustment Clauses
  • Fully Indexed Incomes
  • Partially indexed Incomes
  • Fixed Incomes

Borrowing and Lending
  • Nominal Interest Rate
  • Real Interest Rate = Nominal Interest Rate – Inflation Rate
  • Inflation Premium

Labour Force Population
Labour Force
Participation Rate
Unemployment Rate = unemployment in labour force / labour force x 100
Drawbacks of the Official Unemployment Rate
  • Underemployment
  • Discouraged Workers
  • Dishonesty

Types of Unemployment
  • Frictional Unemployment
  • Structural Unemployment
  • Cyclical Unemployment
Full Employment
Natural Unemployment Rate
Unemployment Insurance
Changing Participation Rates
Minimum Wages
The Costs of Unemployment
  • Potential output