Term
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Definition
-you find so many pennies on the sidewalk relative to silver coins is because it takes time and energy to stop, bend down, and pick them up, and that time and energy are valued more than a penny
-opportunity cost is too high |
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Term
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Definition
-if an economy is operating on its production possibilities frontier, then guns can be produced only at the expense of butter
-more guns=less butter
-opportunity cost of other goods given up |
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Term
| 36-China's population policy |
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Definition
-China's population growth since the initiation of the one child policy has been brought under effective control
-this is translated into movements along and shifts in China's production possibilities curve |
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Term
| 60-how long is the long run? |
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Definition
-length of time it takes to get from market-day supply to long-run supply depends on the character of the good
-babysitting v. aged wine |
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Term
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Definition
-less developed countries (Asia, Africa) price elasticities of demand for their export goods are less than 1
-when exports increase and prices fall, they end up with less revenue |
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Term
| 112-philosophical critique of MU |
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Definition
-money does not make us happier, once our basic needs are met (confirmed by sociological evidence)
-well being depends on friends, faith, family, love
-as we work harder and consume more, we seem to enjoy our lives less |
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Term
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Definition
-by owning stock in a mutual fund, you end up owning fractions of stocks in hundreds of companies
-investing in mutual funds minimizes risk
-diversify money among hundreds of companies |
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Term
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Definition
-Reuben wanted to specialize in high quality ice cream
-used superior ingredients to make it in the ice cream trade |
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Term
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Definition
-changed the way books were printed: now by machine
-mass production in world of literature
-sold 5,000 copies in 10 days
-productivity and technology are intertwined |
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Term
| 193-explicit and implicit costs |
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Definition
-Elaine opened a restaurant
-thought she made $48,000 as total profit, but didn't take implicit costs into account (such as her own labor, use of her garage, use of guest room, etc) |
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Term
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Definition
-125 person crew, process 600 tons of fish a day
-divisions of labor and specialization, makes the average total cost of producing a fish on the boat much less than the average total cost associated with fishing on smaller boats |
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Term
| 222-profit maximization and greed |
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Definition
-are entrepreneurs engaging in profit maximization (strive for the most possible) really harmful to themselves and society?
-is maximizing behavior a sign of greed? |
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Term
| 224-Adam Smith on profit maximization |
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Definition
-what is meaning of a lot of money?
-spend extra money on superfluities
-vanity is what interests us |
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