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Lernmaterialien für Principles of Micronomics an der Universität Wien

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Name the Ten Principles of Economics!

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A. How People Make Decisions

  1. People face Trade- Offs 
  2. The Cost of Something Is What You Give Up to Get It 
  3. Rational People Think at the Margin
  4. People Respond to Incentives
B. How People Interact
  1. Trade Can Make Everyone Better Off 
  2. Markets Are Usually a Good Way to Organize Economic Activity 
  3. Governments Can Sometimes Improve Market Outcomes 
C. How the Economy as a Whole Works
  1. A Country's Standard of Living Depends on its Ability to Produce Goods and Services 
  2. Prices Rice When Government Prints Too Much Money
  3. Society Faces a Short-Run-Trade-Off between Inflation and Unemployment 
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opportunity costs 

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whatever must be given up to obtain some item

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The goal of each firm is to maximize profit. It chooses to produce the quantity of milk that makes profit as large as possible. How can the firm find its profit-maximizing quantity?

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By comparing marginal revenue and marginal cost: As long as marginal revenue exceed marginal cost, increasing the quantity produced raises profit. If marginal revenue is less than marginal cost is should decrease production. If the firm thinks at the margin and makes incremental adjustments to the level of production, it will end up producing the profit-maximizing quantity.

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rational people

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people who systematically and purposefully do the best they can to achieve their objectives

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market economy 

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an economy that allocates resources through the decentralized decisions of many firms and household as they interact in markets for goods and services

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property rights

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the ability of an individual to own and exercise control over scarce resources

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Economics     

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the study of how society manages its scare resources 

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business cycle 

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fluctuations in economic activity, such as measured by the production of goods and services or the number of people employed

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Scarcity 

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the limited nature of society's resources 

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Pie compare equality - efficiency 

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The question of efficiency concerns whether the pie is as big as possible, the question of equality concerns how the pie is sliced and how the portions are distributed among members. 

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productivity 

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the quantity of goods and services produced from each unit of labor input 

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The importance of property rights

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in all cases markets fail to allocate resources efficiently because property rights are not well established: Some item of value does not have an owner with the legal authority to control it. The "goods" of clean air or national defence is valubale, but no one has the right to attach a price to it and profit from its use.

When in absence of property rights causes market failure, the government can potentially solve the problem:It can help to define property rights and thereby unleash market forces(eg pollution permits).As in the provision of national defense the solution is for the government to use tax revenue supply a good that the market fails to supply. 

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Beispielhafte Karteikarten für deinen Principles of Micronomics Kurs an der Universität Wien - von Kommilitonen auf StudySmarter erstellt!

Q:

Name the Ten Principles of Economics!

A:

A. How People Make Decisions

  1. People face Trade- Offs 
  2. The Cost of Something Is What You Give Up to Get It 
  3. Rational People Think at the Margin
  4. People Respond to Incentives
B. How People Interact
  1. Trade Can Make Everyone Better Off 
  2. Markets Are Usually a Good Way to Organize Economic Activity 
  3. Governments Can Sometimes Improve Market Outcomes 
C. How the Economy as a Whole Works
  1. A Country's Standard of Living Depends on its Ability to Produce Goods and Services 
  2. Prices Rice When Government Prints Too Much Money
  3. Society Faces a Short-Run-Trade-Off between Inflation and Unemployment 
Q:

opportunity costs 

A:

whatever must be given up to obtain some item

Q:

The goal of each firm is to maximize profit. It chooses to produce the quantity of milk that makes profit as large as possible. How can the firm find its profit-maximizing quantity?

A:

By comparing marginal revenue and marginal cost: As long as marginal revenue exceed marginal cost, increasing the quantity produced raises profit. If marginal revenue is less than marginal cost is should decrease production. If the firm thinks at the margin and makes incremental adjustments to the level of production, it will end up producing the profit-maximizing quantity.

Q:

rational people

A:

people who systematically and purposefully do the best they can to achieve their objectives

Q:

market economy 

A:

an economy that allocates resources through the decentralized decisions of many firms and household as they interact in markets for goods and services

Mehr Karteikarten anzeigen
Q:

property rights

A:

the ability of an individual to own and exercise control over scarce resources

Q:

Economics     

A:

the study of how society manages its scare resources 

Q:

business cycle 

A:

fluctuations in economic activity, such as measured by the production of goods and services or the number of people employed

Q:

Scarcity 

A:

the limited nature of society's resources 

Q:

Pie compare equality - efficiency 

A:

The question of efficiency concerns whether the pie is as big as possible, the question of equality concerns how the pie is sliced and how the portions are distributed among members. 

Q:

productivity 

A:

the quantity of goods and services produced from each unit of labor input 

Q:

The importance of property rights

A:

in all cases markets fail to allocate resources efficiently because property rights are not well established: Some item of value does not have an owner with the legal authority to control it. The "goods" of clean air or national defence is valubale, but no one has the right to attach a price to it and profit from its use.

When in absence of property rights causes market failure, the government can potentially solve the problem:It can help to define property rights and thereby unleash market forces(eg pollution permits).As in the provision of national defense the solution is for the government to use tax revenue supply a good that the market fails to supply. 

Principles of Micronomics

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