Economics Chapter 2

Supply shock – Events that have a sudden and strong impact on short-run aggregate supply. Example: A war that destroys physical capital or unfavorable weather on a factor of production.
Excess Supply or Surplus – The condition that exists when quantity supplied exceeds quantity demanded at the current price.
Condition of non satiation – a condition that, other things equal, more is always preferred to less. if less is preferred to more, we don't have a good; instead we have a bad.
market failure – a situation in which the market does not distribute resources efficiently
opportunity cost – The best alternative that we give up when we make a choice or decision.
Monopoly – Exclusive control over a product or the means of producing it.
Export – Goods and services traded with, sent to, or sold to other countries
investment – the act of using money to earn more money
Price inelastic * – The demand for a product is not very responsive to price changes. The range of a demand curve where elasticities of demand are less than 1.0.
In a random sample of 5 parts on an assembly line, the probability that one of the parts is a defect is 15% and follows a binomial distribution.  What is the probability of 3 or 4 parts being defective?
Human capital – Brain
Knowledge
Characteristics
Decreasing returns to scale* – when long-run average total cost increases as output increases: diseconomies of scale outweigh economies of scale
producer – a maker of goods or a provider of services
In а rаndоm sаmple оf 5 parts оn an assembly line, the probability that one of the parts is a defect is 15% and follows a binomial distribution.  What is the probability of 3 or 4 parts being defective?
financial panic – a sudden and widespread disruption of financial markets that happens when people suddenly lose faith in the liquidity of financial institutions and markets.
generalized reciprocity – A mode of exchange in which the value of what is given is not calculated, nor is the time of repayment specified.

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