ECONOMY II

ECONOMY II

FUNDAMENTAL PARTS
1. FUNDAMENTAL PART OF MARKET
  1. BUYER
    1. BUYYERS' DEMAND FOR THAT GOOD
  2. SELLER
    1. SELLERS' SUPPLY OF THAT GOOD
LAWS OF MARKET
1. DEMAND
  1. INVERSE RELATIONSHIP BETWEEN THE PRICE AND THE QUANTITY DEMANDES OF THAT GOOD
  2. DEMAND CURVE
    1. IS NOTHING MORE THAN A GRAPH OF THE DEMAND SCHEDULE
    2. ELEMENTS
      1. MARKET EQUILIBRIUM
        PRICES RELATIVELY STABLE
        QUANTITY OF GOODS OR SERVICES SUPPLIED IS EQUAL TO THE QUANTITY DEMANDED
        INTERSECTION OF THESE TWO CURVES
      2. SURPLUS
        QUANTITY SUPPLIED IS GRATER THAN THE QUANTITY DEMANDED AT A GIVEN PRICE
      3. SHORTAGE
        QUANTITY DEMANDED IS GRATER THAN THE QUANTITY SUPPLIED AT A GIVEN PRICE
  3. CHANGES IN DEMAND
    1. CONSUMER
      1. INCOME
      2. TASTES
      3. NUMBER
    2. PRODUCTS
      1. SUBSTITUTE
      2. COMPLEMENT
    3. A MOVEMENT TO THE RIGHT MEANS A INCREASE
    4. TO THE LEFT A DECREASE
2. SUPPLY
  1. DIRECT RELATIONSHIP BETWEEN PRICE AND QUANTITY SUPPLIED
    1. PRICE GOOD INCREASES, SELLERS ARE WILLING TO SUPPLY MORE OF THAT GOOD
  2. CHANGE IN SUPPLY
    1. TECHNOLOGY
    2. COSTS OF INPUTS
    3. PRODUCTIVITY
    4. GOVERNMENT POLICIES OR REGULATIONS
    5. NUMBER OF SELLERS
    6. MOVEMENT TO THE RIGHT MEANS INCREASE
    7. MOVEMENT TO THE LEFT MEANS DECREASE
MARKET
1. AN ARRENGEMENT WHEBERY BUYERS AND SELLERS INTERACT TO DETERMINE THE PRICES AND QUANTITIES OF A COMMODITY
2. STRUCTURES
  1. PERFECT COMPETITION
    1. MONOPOLISTIC
      1. OLIGOPOLY
        MONOPOLY
        SINGLE SELLER
        UNIQUE PRODUCT
        IMPOSSIBLE ENTERY TO THE MARKET
        COMPLETE MARKET POWER
        SMALL NUMBER OF SELLERS
        IDENTICAL OR DIFFERENCIATED PRODUCTS
        IT IS DIFFICULT TO ENTER TO THE MARKET
        LARGE AMOUNT OF MARKET POWER
      2. LARGE NUMBER OR SELLERS
      3. DIFFERENTIATED PRODUCT
      4. EASY ENTRY AND EXIT TO THE MARKET
      5. SMALL AMOUNT OF MARKET POWER
    2. NECESSARY CONDITIONS
      1. LARGE NUMBER OF WELL-INFORMED INDEPENDENT BUYERS AND SELLERS WHO EXCHANGE INDENTICAL PRODUCTS
      2. NO SINGLE SELLER IS LARGER ENOUGH OR POWERFUR ENOUGH TO AFFECT THE PRICE
      3. NI DIFFERENCE IN QUALITY OF PRODUCTS
      4. EACH BUYER AND SELLER ACTS INDEPENDENTLY
      5. BUYERS END SELLERS ARE FREE RO ENTER INTO OR GET OUT OF BUISNESS
3. FAILURE
  1. SITUATION WHERE MARKET EQUILIBRIUM RESULTS IN TOO FEW OR TOO MANYRESOURCES USED IN THE PRODUCTION OF A GOOD OR SERVICE
    1. THIS INEFFICIENCY MAY JUSTIFY GOVERNMENT INTERVENTION
  2. CASES
    1. LACK OF COMPETITION
    2. EXTERNALITIES
      1. ALSO CALLED "SPILLOVER EFFECTS OR NEIGHBORHOOD EFFECTS"
      2. AFECCTS THIRD PARTIES
      3. POSITIVE
        BENEFIT RECIVED BY SOMEONE WHO HAD NOTHING TO DO WITH THE ACTIVITY THAT GENERATED THE BENEFIT
      4. NEGATIVE
        HARM SUFFERED BY A THIRD PARTY BECAUSE OF ACTION BY OTHERS
    3. PUBLIC GOODS
      1. USERS COLLECTIVELY CONSUME BENEFITS
      2. THERE IS NO WAY TO PREVENT PEOPLE WHO DO NOT PAY FROM CONSUMING THE GOOD OR SERVICE
    4. INCOME INEQUALITY
      1. INEQUAL DISTRIBUTION OF INCOME
        HOLLYWOOD
PRODUCTION POSSIBILITIES
1. THE VARIOUS COMBINATIONS OF GOODS THAT CAN BE PRODUCED IN AN ECONOMY
  1. USES
    1. AVAILABLE RESOURCES
    2. TECHNOLOGY EFFICIENTLY
2. CONSUMPTION GOODS
3. CAPITAL GOODS
OPPORTUNITY COST
1. QUANTITY OF OTHER GOODS THAT MUST BE GIVEN UP TO ABTAIN A GOOD
2. LAW OF INCREASING COSTS
  1. PRODUCING EACH ADDITIONAL UNIT OF CAPITAL INCREASES AS MORE UNITS ARE PRODUCED
BUISINESS CYCLE
1. PHASES
  1. RECESSION
  2. RECOVERY
  3. PEOSPERITY
    1. DOWNTURN
2. ELEMENTS
  1. DEPRESSION
    1. ACCOMPANIED BY HIGH UNEMPLOYMENT
      1. LASTING MORE THAN A YEAR
  2. RECESSION
    1. MARKED BY CONTRCATIONS IN MANY SECTORS OF THE ECONOMY
      1. PERIOD OF DECLINE OF OUTPUT
        LASTING 6 MONTHS
  3. EXPANSION
    1. PHASE OF ECONOMY ACTIVITY DURING WICH THERE IS AN INCREASE IN THE ECONOMY'S TOTAL PRODUCTION
  4. PEAK
    1. REACHES THE MAXIMUM LEVEL
  5. TROUGH
    1. DECLINES TO THE MINIMUM LEVEL
  6. DOWNTURN
    1. PHASE IN WICH REAL "GDP" DECLINES
    2. INFLATION MODERATES AND UNEMPLOYMENT EMERGES
3. ECENOMIC FLUCTUATION
  1. RISE AND FALL OF ECONOMIC ACTIVITY RELATIVE TO THE LONG-TERM GROWTH TREND OF THE ECONOMY
GDP
1. GROSS DOMESTIC PRODUCT
  1. IS CALCULATED ADDING UP THE TOTAL VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED IN THE ECONOMY IN A GIVEN YEAR
GNP
1. GROSS NATIONAL PRODUCT
  1. BEER "CORONA"
LABOR FORCE
1. ALL NONINSTITUTIONALIZED INDIVIDUALS 16 YEARS OLD OR OLDOER THAT HAS OR SEARCH A WORK
EMPLOYMENT AND UNEMPLOYMENT
1. FULL EMPLOYMENT
  1. WHEN THERE IS NO CYCLICAL UNEMPLOYMENT
  2. A 5-6% OF UNEMPLOYMENT IS CONSIDERED FULL EMPLOYMENT
2. TYPES OF UNEMPLOYMENT
  1. FRICTIONAL
    1. BREIF PERIOS OF UNEMPLOYMENT CAUSED BY PEOPLE DECIDING CHANGE JOB
  2. STRUCTURAL
    1. RESULTS FROM FUNDAMENTAL TECHNOLOGICAL CHANGES IN PRODUCTION
      1. CHARLIE'S DAD
  3. SEASONAL
    1. CAUSED BY SEASONAL SHIFTS IN LABOR SUPPLY AND DEMAND
  4. CYCLICAL
    1. ASSOCIATED WITH THE DOWNTURN AND RECESSION PHASES OF THE BUSINESS CYCLE

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	Created by Antonio Espinoza over 9 years ago