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Portfolio 2
 

Portfolio 2

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    Portfolio 2 Portfolio 2 Presentation Transcript

    • Portfolio
      Takahiro Kono
    • Definitions
      Cost Theory: the theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it
      Revenue Theory: the change in total revenue earned by a firm that results from employing one more unit of labor
      Profit Theory: The positive gain from an investment or business operation after subtracting from all expenses
      Marginal Cost: Increase in total cost of producing an extr unit of output
    • Total Costs: Total cost to produce a certain output TC=TFC+TVC
      Total Variable Cost: Total cost of the variable assets that a firm uses in a given period of time
      Total Fixed Costs: Total cost of fixed assets used in a given time period
      Price Discrimination: When firms actively adjust prices according to the willingness/ ability of different consumers to pay
      Macroeconomics: The Study of a national economy
      GDP: Gross Domestic Product= Total value of all spending in an economy
    • GNP: Gross National Product= Total income earned by a nation’s factors of production regardless of where the assets are located
      Real GDP: Nominal GDP adjusted for inflation
      Economic Development: A multidimensional concept that includes poverty reduction, provision of education, health care and law and order, civil liberties and civic participation
      Aggregate Demand: The aggregate (total) spending on goods and service in a period of time at a given price level
      Aggregate Supply: The amount of goods and services that all industries will produce at a given price level
      Fluctuations in the growth of real output, consisting of periods of expansion and contraction called business cycles or trade cycles
    • Recession: When the economy experiences two consecutive quarters of falling GDP
      Neoclassical Perspective: Price mechanism regulates markets, full employment achieved without intervention, economy is an harmonious system, perfect competitive equilibrium is the benchmark
      Keynesian Perspective: Price mechanism fails as wages are “downward sticky”, reaching full employment requires intervention, the economy is inherently unstable, the economy can get stuck in the SR
      Fiscal Policy: Increase government spending, decrease personal and/or business taxes, combination of both policies
      Monetary Policy: Increase money supply, lower interest rates (easy money)
    • The Multiplier Effect: Any change in consumption, investment, government spending, and net exports. Prices induced expenditures, a chain reaction of further expenditures
      Crowding-out Effect: Governments borrow to finance fiscal policy, interest rates rise, private investment fails
      Unemployment: Number of adults who are not working but actively look for a job
      Underemployment: Number of adults who are working part-time but looking for full time work or people who are not fully using their skills
      Unemployment Rate: Number of unemployed as a percentage of the labor force
    • Inflation: A continuing increase in the general price level of goods and service within the economy
      Deflation: A continuing decrease in the general price level of goods and service within the economy
      CPI (Consumer Price Index): Compares the value of a basket of goods and services in one year with a same basket in the base year
    • Diagrams
    • The Total Product Curve
    • Average and Marginal Product Curves
    • TFC, TVC, and TC
    • Cost Curves
    • LRAC
    • Economies and Diseconomies of Scale
    • Revenue Curves: Perfectly Esalstic Demand
      Price
      D=AR=MR
      5
      Output
    • Relationship between D, AR, MR, TR, and PED for a Normal Demand Curve
    • Shut Down Price
    • Profit Maximizing Level of Output with Perfectly Elastic Demand
    • Profit Maximizing Level of Output with Perfectly Elastic Demand
    • Profit Maximizing Level of Output with Normal Demand
    • Profit Maximizing Level of Output with Normal Demand
    • Normal Profit Normal Demand
    • Abnormal Profit Normal Demand
    • Loss Normal Demand
    • Profit, Sales, and Revenue Maximization
    • Profit, Sales, and Revenue Maximization
    • Price Discrimination Example Total Ticket Sales
    • Price Discrimination Example Adult Tickets
    • Price Discrimination Example Adult Tickets
    • Productive Efficiency: Resources are not wasted
    • Allocative Efficiency/ Socially Optimum Level of Output
    • Perfect Competition Versus Monopoly
    • Perfect Competition Versus Monopoly
    • Aggregate Demand Curve
    • Shifts in AD
    • Demand for investment funds
    • Aggregate Supply in the Short Run
    • Shifts in SRAS
    • Macroeconomic Equilibrium
    • Shifts in AD
    • Shifts in SRAS
    • Business Cycle
    • Using Diagrams to Illustrate Macroeconomic Goals
    • Using Diagrams to Illustrate Macroeconomic Goals
    • Changes in AD
    • Changes in SRAS
    • Deflationary (recessionary) Gap
    • Inflationary Gap
    • Full Employment Level of Output
    • Changes in AD
    • Changes in AS
    • Neoclassical (Free Market) LRAS
    • Long-run Equilibrium
    • Long-run equilibrium and Decline in AD
    • Return to Long-run equilibrium
    • Long-run equilibrium
    • Long-run equilibrium and Increase in AD
    • Return to Long-run equilibrium
    • Keynesian SR/LRAS
    • Inflationary Gap in the Keynesian Perspective
    • Full Employment Equilibrium in the Keynesian Perspective
    • Economic Growth: Neoclasical Perspective
    • Economic Growth: Keynesian Perspective
    • The Multiplier Effect
    • Crowding-out Effect
    • Crowding-out Effect
    • Demand-pull Inflation
    • Cost-push Inflation
    • “Good” Deflation
    • Phillips Curve
    • Phillips Curve