on 07-Dec-2016 (Wed)

Annotation 1425427795212

 Economics in a Global Context Study Session 6 #cfa-level-1 #economics #economics-in-a-global-context #study-session-6 Reading 20. International Trade and Capital Flows explains the flows of goods and services, physical capital, and financial capital across national borders. The reading explains how the different types of flows are linked and how trade may benefit trade partners. The accounting for these flows and the institutions that facilitate and regulate them are also covered. The payment system supporting trade and investment depends on world currency markets. Investment practitioners need to understand how these markets function in detail because of their importance in portfolio management and economic analysis. Reading 21. Currency Exchange Rates provides an overview of currency market fundamentals.

Annotation 1425446407436

 GNP #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows Gross national product (GNP) measures the market value of all final goods and services produced by factors of production (such as labor and capital) supplied by residents of a country, regardless of whether such production takes place within the country or outside of the country.

2.1. Basic Terminology
ic product (GDP) measures the market value of all final goods and services produced by factors of production (such as labor and capital) located within a country/economy during a given period of time, generally a year or a quarter. <span>Gross national product (GNP), however, measures the market value of all final goods and services produced by factors of production (such as labor and capital) supplied by residents of a country, regardless of whether such production takes place within the country or outside of the country. The difference between a country’s GDP and its GNP is that GDP includes, and GNP excludes, the production of goods and services by foreigners within that country, whereas GNP

Annotation 1425457679628

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully.

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Annotation 1425460825356

2.1. Basic Terminology

Annotation 1425470262540

 Study Session 4 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 This study session focuses on the microeconomic principles used to describe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

Article 1425472097548

1. INTRODUCTION

In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logical starting point for the study of economics. This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. In private enterprise market economies, which are the chief concern of investment analysts, demand and supply analysis encompasses the most basi

Annotation 1425473408268

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics

1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and d

Annotation 1425474981132

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Macroeconomics deals with aggregate economic quantities, such as national output and national income.

1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logi

Annotation 1425476553996

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses.

1. INTRODUCTION
he study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. <span>Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logical starting point for the study of economics. This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. Demand

Annotation 1425479699724

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities.

1. INTRODUCTION
f individual economic units, including consumers and businesses. Microeconomics is a logical starting point for the study of economics. This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. <span>Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. In private enterprise market economies,

Annotation 1425481272588

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit.

1. INTRODUCTION
; This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, <span>prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. In private enterprise market economies, which are the chief concern of investment analysts, demand and supply analysis encompasses the most basic set of microeconomic tools.

Annotation 1425482845452

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 In private enterprise market economies, which are the chief concern of investment analysts, demand and supply analysis encompasses the most basic set of microeconomic tools.

1. INTRODUCTION
is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. <span>In private enterprise market economies, which are the chief concern of investment analysts, demand and supply analysis encompasses the most basic set of microeconomic tools. Traditionally, microeconomics classifies private economic units into two groups: consumers (or households) and firms. These two groups give rise, respectively, to the theor

Annotation 1425484418316

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 microeconomics classifies private economic units into two groups: consumers (or households) and firms.

1. INTRODUCTION
and the cost to the seller of that unit. In private enterprise market economies, which are the chief concern of investment analysts, demand and supply analysis encompasses the most basic set of microeconomic tools. Traditionally, <span>microeconomics classifies private economic units into two groups: consumers (or households) and firms. These two groups give rise, respectively, to the theory of the consumer and theory of the firm as two branches of study. The theory of the consumer deals with consumption (the deman

Annotation 1425485991180

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 The theory of the consumer deals with consumption (the demand for goods and services) by utility-maximizing individuals (i.e., individuals who make decisions that maximize the satisfaction received from present and future consumption)

1. INTRODUCTION
3; Traditionally, microeconomics classifies private economic units into two groups: consumers (or households) and firms. These two groups give rise, respectively, to the theory of the consumer and theory of the firm as two branches of study. <span>The theory of the consumer deals with consumption (the demand for goods and services) by utility-maximizing individuals (i.e., individuals who make decisions that maximize the satisfaction received from present and future consumption). The theory of the firm deals with the supply of goods and services by profit-maximizing firms. The theory of the consumer and the theory of the firm are important because they help u

Annotation 1425487564044

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 The theory of the firm deals with the supply of goods and services by profit-maximizing firms.

1. INTRODUCTION
y. The theory of the consumer deals with consumption (the demand for goods and services) by utility-maximizing individuals (i.e., individuals who make decisions that maximize the satisfaction received from present and future consumption). <span>The theory of the firm deals with the supply of goods and services by profit-maximizing firms. The theory of the consumer and the theory of the firm are important because they help us understand the foundations of demand and supply. Subsequent readings will focus on the theory of

Annotation 1425489136908

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Investment analysts, particularly equity and credit analysts, must regularly analyze products and services, their costs, prices, possible substitutes, and complements, to reach conclusions about a company’s profitability and business risk (risk relating to operating profits). Furthermore, unless the analyst has a sound understanding of the demand and supply model of markets, he or she cannot hope to forecast how external events—such as a shift in consumer tastes or changes in taxes and subsidies or other intervention in markets—will influence a firm’s revenue, earnings, and cash flows.

1. INTRODUCTION
s. The theory of the consumer and the theory of the firm are important because they help us understand the foundations of demand and supply. Subsequent readings will focus on the theory of the consumer and the theory of the firm. <span>Investment analysts, particularly equity and credit analysts, must regularly analyze products and services, their costs, prices, possible substitutes, and complements, to reach conclusions about a company’s profitability and business risk (risk relating to operating profits). Furthermore, unless the analyst has a sound understanding of the demand and supply model of markets, he or she cannot hope to forecast how external events—such as a shift in consumer tastes or changes in taxes and subsidies or other intervention in markets—will influence a firm’s revenue, earnings, and cash flows. Having grasped the tools and concepts presented in this reading, the reader should also be able to understand many important economic relations and facts and be able to ans

Annotation 1425490709772

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in prices and income.

1. INTRODUCTION
s to converge to an equilibrium price? What are the conditions that would make that equilibrium stable or unstable in response to external shocks? How do different types of auctions affect price discovery? <span>This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in prices and income. A summary and practice problems conclude the reading. <span><body><html>

Article 1425493069068

2. TYPES OF MARKETS

Analysts must understand the demand and supply model of markets because all firms buy and sell in markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are organizations that buy the services of those factors. Firms then transform those services into intermediate or final goods and services. ( Intermediate goods and services are those purchased for use as inputs to produce other goods and services, whereas final goods and ser

Annotation 1425495166220

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Annotation 1425496739084

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are organizations that buy the services of those factors. Firms then transform those services into intermediate or final goods and services

2. TYPES OF MARKETS
ets. Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). <span>Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are organizations that buy the services of those factors. Firms then transform those services into intermediate or final goods and services. ( Intermediate goods and services are those purchased for use as inputs to produce other goods and services, whereas final goods and services are in the final form purchased by househ

Annotation 1425498311948

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Generally, market interactions are voluntary. Firms offer their products for sale when they believe the payment they will receive exceeds their cost of production. Households are willing to purchase goods and services when the value they expect to receive from them exceeds the payment necessary to acquire them. Whenever the perceived value of a good exceeds the expected cost to produce it, a potential trade can take place. This fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off.

2. TYPES OF MARKETS
n goods markets: firms are sellers and both households and firms are buyers. For example, firms are buyers of capital goods (such as equipment) and intermediate goods, while households are buyers of a variety of durable and non-durable goods. <span>Generally, market interactions are voluntary. Firms offer their products for sale when they believe the payment they will receive exceeds their cost of production. Households are willing to purchase goods and services when the value they expect to receive from them exceeds the payment necessary to acquire them. Whenever the perceived value of a good exceeds the expected cost to produce it, a potential trade can take place. This fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off. In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisure

Annotation 1425499884812

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisure time they must forgo. In contrast, firms hire workers when they judge that the value of the productivity of workers is greater than the cost of employing them. A major source of household income and a major cost to firms is compensation paid in exchange for labor services.

2. TYPES OF MARKETS
fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off. <span>In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisure time they must forgo. In contrast, firms hire workers when they judge that the value of the productivity of workers is greater than the cost of employing them. A major source of household income and a major cost to firms is compensation paid in exchange for labor services. Additionally, households typically choose to spend less on consumption than they earn from their labor. This behavior is called saving , through which households can accum

Annotation 1425501457676

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Through, saving households can accumulate financial capital, the returns on which can produce other sources of household income, such as interest, dividends, and capital gains. Households may choose to lend their accumulated savings (in exchange for interest) or invest it in ownership claims in firms (in hopes of receiving dividends and capital gains).

2. TYPES OF MARKETS
they judge that the value of the productivity of workers is greater than the cost of employing them. A major source of household income and a major cost to firms is compensation paid in exchange for labor services. Additionally, <span>households typically choose to spend less on consumption than they earn from their labor. This behavior is called saving , through which households can accumulate financial capital, the returns on which can produce other sources of household income, such as interest, dividends, and capital gains. Households may choose to lend their accumulated savings (in exchange for interest) or invest it in ownership claims in firms (in hopes of receiving dividends and capital gains). Households make these savings choices when their anticipated future returns are judged to be more valuable today than the present consumption that households must sacrifice when they save. Indeed, a major purpose of financial institutions and markets is to enable the transfer of these savings into capital investments. Firms use capital markets (markets for

Annotation 1425503030540

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 A major purpose of financial institutions and markets is to enable the transfer of savings into capital investments.

2. TYPES OF MARKETS
receiving dividends and capital gains). Households make these savings choices when their anticipated future returns are judged to be more valuable today than the present consumption that households must sacrifice when they save. <span>Indeed, a major purpose of financial institutions and markets is to enable the transfer of these savings into capital investments. Firms use capital markets (markets for long-term financial capital—that is, markets for long-term claims on firms’ assets and cash flows) to sell debt (in bond markets) or equity (in

Annotation 1425504603404

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Indeed, a major purpose of financial institutions and markets is to enable the transfer of these savings into capital investments. Firms use capital markets (markets for long-term financial capital—that is, markets for long-term claims on firms’ assets and cash flows) to sell debt (in bond markets) or equity (in equity markets) in order to raise funds to invest in productive assets, such as plant and equipment. They make these investment choices when they judge that their investments will increase the value of the firm by more than the cost of acquiring those funds from households. Firms also use such financial intermediaries as banks and insurance companies to raise capital, typically debt funding that ultimately comes from the savings of households, which are usually net accumulators of financial capital.

2. TYPES OF MARKETS
receiving dividends and capital gains). Households make these savings choices when their anticipated future returns are judged to be more valuable today than the present consumption that households must sacrifice when they save. <span>Indeed, a major purpose of financial institutions and markets is to enable the transfer of these savings into capital investments. Firms use capital markets (markets for long-term financial capital—that is, markets for long-term claims on firms’ assets and cash flows) to sell debt (in bond markets) or equity (in equity markets) in order to raise funds to invest in productive assets, such as plant and equipment. They make these investment choices when they judge that their investments will increase the value of the firm by more than the cost of acquiring those funds from households. Firms also use such financial intermediaries as banks and insurance companies to raise capital, typically debt funding that ultimately comes from the savings of households, which are usually net accumulators of financial capital. Microeconomics, although primarily focused on goods and factor markets, can contribute to the understanding of all types of markets (e.g., markets for financial securities)

Annotation 1425506176268

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Microeconomics, although primarily focused on goods and factor markets, can contribute to the understanding of all types of markets (e.g., markets for financial securities).

2. TYPES OF MARKETS
Firms also use such financial intermediaries as banks and insurance companies to raise capital, typically debt funding that ultimately comes from the savings of households, which are usually net accumulators of financial capital. <span>Microeconomics, although primarily focused on goods and factor markets, can contribute to the understanding of all types of markets (e.g., markets for financial securities). <span><body><html>

Flashcard 1425508273420

Tags
#digital #work
Question
what is digital?
retail banks have digitized only 20 to 40 percent of their processes; 90 percent of European banks invest less than 0.5 percent of their total spending on digital. As a result, most have relatively shallow digital offerings focused on enabling basic customer transactions.

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Flashcard 1425512992012

Tags
Question
[...] measures the market value of all final goods and services produced by factors of production supplied by residents of a country, regardless of whether such production takes place within the country or outside of the country.
Gross national product (GNP)

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Gross national product (GNP) measures the market value of all final goods and services produced by factors of production (such as labor and capital) supplied by residents of a country, regardless of whether such p

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2.1. Basic Terminology
ic product (GDP) measures the market value of all final goods and services produced by factors of production (such as labor and capital) located within a country/economy during a given period of time, generally a year or a quarter. <span>Gross national product (GNP), however, measures the market value of all final goods and services produced by factors of production (such as labor and capital) supplied by residents of a country, regardless of whether such production takes place within the country or outside of the country. The difference between a country’s GDP and its GNP is that GDP includes, and GNP excludes, the production of goods and services by foreigners within that country, whereas GNP

Flashcard 1425514564876

Tags
Question
Gross national product (GNP) measures the market value of all final goods and services produced by factors of production supplied by residents of a country, regardless of whether such production takes place [...]
within the country or outside of the country.

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>Gross national product (GNP) measures the market value of all final goods and services produced by factors of production (such as labor and capital) supplied by residents of a country, regardless of whether such production takes place within the country or outside of the country.<span><body><html>

Original toplevel document

2.1. Basic Terminology
ic product (GDP) measures the market value of all final goods and services produced by factors of production (such as labor and capital) located within a country/economy during a given period of time, generally a year or a quarter. <span>Gross national product (GNP), however, measures the market value of all final goods and services produced by factors of production (such as labor and capital) supplied by residents of a country, regardless of whether such production takes place within the country or outside of the country. The difference between a country’s GDP and its GNP is that GDP includes, and GNP excludes, the production of goods and services by foreigners within that country, whereas GNP

Flashcard 1425516662028

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Question
GDP is more widely used as a measure of economic activity occurring [...] the country, which, in turn, affects employment, growth, and the investment environment.
within

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GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment.

Original toplevel document

2.1. Basic Terminology
f citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada). Therefore, <span>GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment. Imports are goods and services that a domestic economy (i.e., households, firms, and government) purchases from other countries. For example, the US economy imports (purch

Flashcard 1425518234892

Tags
Question
[...] is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment.
GDP

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GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment.</htm

Original toplevel document

2.1. Basic Terminology
f citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada). Therefore, <span>GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment. Imports are goods and services that a domestic economy (i.e., households, firms, and government) purchases from other countries. For example, the US economy imports (purch

Flashcard 1425519807756

Tags
Question
GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects [...], growth, and the investment environment.
employment

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GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment.

Original toplevel document

2.1. Basic Terminology
f citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada). Therefore, <span>GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment. Imports are goods and services that a domestic economy (i.e., households, firms, and government) purchases from other countries. For example, the US economy imports (purch

Flashcard 1425521380620

Tags
Question
GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects [...] , [...], and the investment environment.
employment

growth

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GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment.

Original toplevel document

2.1. Basic Terminology
f citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada). Therefore, <span>GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment. Imports are goods and services that a domestic economy (i.e., households, firms, and government) purchases from other countries. For example, the US economy imports (purch

Flashcard 1425522953484

Tags
Question
GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the [...].
investment environment

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GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment.

Original toplevel document

2.1. Basic Terminology
f citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada). Therefore, <span>GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment. Imports are goods and services that a domestic economy (i.e., households, firms, and government) purchases from other countries. For example, the US economy imports (purch

Annotation 1425525312780

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) .

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Open it
Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that count

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Flashcard 1425526885644

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[...] is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports).

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Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, the

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Flashcard 1425528458508

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Question
Net exports is the difference between the value of a country’s exports and the value of its imports i.e., [...].
value of exports minus imports)

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Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (defici

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Flashcard 1425530031372

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Question
[...] is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports)

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Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (defici

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Flashcard 1425531604236

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Question
If the value of a country's exports equals the value of imports, then trade is [...].
balanced

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tml>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) .<html>

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Flashcard 1425533177100

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If the value of exports is greater (less) than the value of imports, then there is a [...] .

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’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a <span>trade surplus (deficit) .<span><body><html>

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Annotation 1425534749964

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country.

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Open it
ts (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . <span>When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationshi

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Annotation 1425535798540

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. The balance of payments explains these relationships.

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Open it
ts (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . <span>When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully.<span><body><html>

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Flashcard 1425538157836

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Question
When a country has a trade surplus, it [...] to foreigners or [...]
lends or buys assets from foreigners

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Open it
When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade def

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Flashcard 1425539730700

Tags
Question
When a country has a trade surplus, it lends to [...] or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country.

Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. The balance of payments explains these relationships.
foreigners

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When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has t

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Flashcard 1425541303564

Tags
Question
When a country has a trade surplus, it [...] or [...] reflecting the financing needed by foreigners running trade deficits with that country.

it lends to foreigners or buys assets from foreigners

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When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from f

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Annotation 1425542876428

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. The balance of payments explains these relationships.

Parent (intermediate) annotation

Open it
When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. The balance of payments explains these relationships.

Original toplevel document

2.1. Basic Terminology
e while those in Europe and the Middle East (which benefited from rising prices of their petroleum exports) experienced a substantial increase. Africa also experienced a small improvement in its terms of trade during this period. <span>Net exports is the difference between the value of a country’s exports and the value of its imports (i.e., value of exports minus imports). If the value of exports equals the value of imports, then trade is balanced. If the value of exports is greater (less) than the value of imports, then there is a trade surplus (deficit) . When a country has a trade surplus, it lends to foreigners or buys assets from foreigners reflecting the financing needed by foreigners running trade deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a go

Annotation 1425545235724

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows An open economy , is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and services at the price prevailing in the world market, the world price .

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An open economy , is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and services at the price prevailing in the world market, the world price . An open economy can provide domestic households with a larger variety of goods and services, give domestic companies access to global markets and customers, and offer goods a

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2.1. Basic Terminology

Flashcard 1425546808588

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An [...] , is an economy that trades with other countries.

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An open economy , is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and services at the price prevailing in t

Original toplevel document

2.1. Basic Terminology

Flashcard 1425548381452

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If there are no restrictions on trade, then members of an [...] can buy and sell goods and services at the price prevailing in the world market, the world price .
open economy

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An open economy , is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and services at the price prevailing in the world market, the world price .<

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2.1. Basic Terminology

Flashcard 1425549954316

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If there are no restrictions on trade, then members of an open economy can buy and sell goods and services at the price prevailing in the world market, the [...]

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d>An open economy , is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and services at the price prevailing in the world market, the world price .<html>

Original toplevel document

2.1. Basic Terminology

Annotation 1425552575756

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities.

Study Session 4
This study session focuses on the microeconomic principles used to describe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive fr

Flashcard 1425554148620

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Question

Reading 13 explains [...]—the study of how buyers and sellers interact to determine transaction prices and quantities.
the concepts and tools of demand and supply analysis

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Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities.

Original toplevel document

Study Session 4
This study session focuses on the microeconomic principles used to describe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive fr

Flashcard 1425555721484

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Reading 13 explains the concepts and tools of demand and supply analysis—the study of [...] to determine transaction prices and quantities.

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Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities.

Original toplevel document

Study Session 4
This study session focuses on the microeconomic principles used to describe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive fr

Flashcard 1425557294348

Tags
Question

Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine [...]
transaction prices and quantities.

status measured difficulty not learned 37% [default] 0

Parent (intermediate) annotation

Open it
Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities.

Original toplevel document

Study Session 4
This study session focuses on the microeconomic principles used to describe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive fr

Annotation 1425558867212

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption.

Study Session 4
cribe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. <span>Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the c

Flashcard 1425559915788

Tags
Question
Reading 14 covers [...] which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption.
the theory of the consumer,

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Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption.</

Original toplevel document

Study Session 4
cribe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. <span>Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the c

Flashcard 1425561488652

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Question
Reading 14 addresses the [...] by individuals who make decisions to maximize the satisfaction they receive from present and future consumption.
demand for goods and services

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Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption.

Original toplevel document

Study Session 4
cribe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. <span>Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the c

Flashcard 1425563061516

Tags
Question
Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to [...] they receive from present and future consumption.
maximize the satisfaction

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Open it
Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption.

Original toplevel document

Study Session 4
cribe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. <span>Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the c

Flashcard 1425564634380

Tags
Question
individuals, in the theory of the consumer, make decisions to [...] they receive from present and future consumption.
maximize the satisfaction

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Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption.

Original toplevel document

Study Session 4
cribe the marketplace behavior of consumers and firms. Reading 13 explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. <span>Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the c

Annotation 1425566731532

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation.

Study Session 4
quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. <span>Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools fo

Flashcard 1425568304396

Tags
Question
Reading 15 deals with the [...], focusing on the supply of goods and services by [...] .
1. theory of the firm

2. profit-maximizing firms

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Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation.

Original toplevel document

Study Session 4
quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. <span>Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools fo

Flashcard 1425569877260

Tags
Question
The theory of the firm focuses on the supply of goods and services by [...].
profit-maximizing firms

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Open it
Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation.

Original toplevel document

Study Session 4
quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. <span>Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools fo

Flashcard 1425571450124

Tags
Question
Reading 15 provides the basis for understanding [...]
the cost side of firms’ profit equation.

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Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation.

Original toplevel document

Study Session 4
quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. <span>Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools fo

Flashcard 1425573022988

Tags
Question
Reading 15 provides the basis for understanding [...] of [...]
the cost side of firms’ profit equation.

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Open it
Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation.

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Study Session 4
quantities. Reading 14 covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the satisfaction they receive from present and future consumption. <span>Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools fo

Annotation 1425574595852

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Flashcard 1425575644428

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Reading 16 completes the picture by [...] and explains the types of markets in which firms sell output.

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Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the

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Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Flashcard 1425577217292

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Reading 16 explains [...] in which firms sell output.
the types of markets

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Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of dif

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Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Flashcard 1425578790156

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Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms [...].
sell output

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Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.</

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Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Flashcard 1425580363020

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Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms [...].
sell output

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Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.</

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Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Annotation 1425582722316

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

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Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

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Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Annotation 1425583770892

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Overall, Study Session 4. provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

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Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

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Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Flashcard 1425586130188

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Overall, Study Session 4. provides the economic tools for understanding how [...] markets function and the competitive characteristics of different industries.
product and resource

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Overall, Study Session 4. provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

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Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Flashcard 1425587703052

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Overall, Study Session 4. provides the economic tools for understanding how product and resource markets function and the [...] of different industries.
competitive characteristics

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Overall, Study Session 4. provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

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Study Session 4
nsumption. Reading 15 deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. <span>Reading 16 completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.<span><body><html>

Flashcard 1425589275916

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[...] deals with aggregate economic quantities, such as national output and national income.

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Macroeconomics deals with aggregate economic quantities, such as national output and national income.

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logi

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Macroeconomics deals with [...]
aggregate economic quantities,

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Macroeconomics deals with aggregate economic quantities, such as national output and national income.

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logi

Flashcard 1425592421644

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Macroeconomics deals with aggregate economic quantities, such as [...] and [...]
national output

national income.

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Macroeconomics deals with aggregate economic quantities, such as national output and national income.

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logi

Flashcard 1425593994508

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Macroeconomics deals with aggregate economic quantities, such as national output and [...]
national income.

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Macroeconomics deals with aggregate economic quantities, such as national output and national income.

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logi

Flashcard 1425595567372

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Macroeconomics deals with aggregate economic quantities, such as [...]
national output and national income.

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Macroeconomics deals with aggregate economic quantities, such as national output and national income.

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and decision making of individual economic units, including consumers and businesses. Microeconomics is a logi

Flashcard 1425598975244

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[...] the study of how buyers and sellers interact to determine transaction prices and quantities.

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Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities.

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1. INTRODUCTION
f individual economic units, including consumers and businesses. Microeconomics is a logical starting point for the study of economics. This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. <span>Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. In private enterprise market economies,

Flashcard 1425600548108

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Demand and supply analysis is the study of how [...] to determine transaction prices and quantities.

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Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities.

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1. INTRODUCTION
f individual economic units, including consumers and businesses. Microeconomics is a logical starting point for the study of economics. This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. <span>Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. In private enterprise market economies,

Flashcard 1425602120972

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Demand and supply analysis is the study of [...]
how buyers and sellers interact to determine transaction prices and quantities.

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Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities.

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1. INTRODUCTION
f individual economic units, including consumers and businesses. Microeconomics is a logical starting point for the study of economics. This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. <span>Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. In private enterprise market economies,

Flashcard 1425603693836

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prices simultaneously reflect both the value to the buyer of the [...] unit and the cost to the seller of that unit.
next (or marginal)

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prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit.

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1. INTRODUCTION
; This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, <span>prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. In private enterprise market economies, which are the chief concern of investment analysts, demand and supply analysis encompasses the most basic set of microeconomic tools.

Flashcard 1425605266700

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prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the [...] of that unit.
cost to the seller

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prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit.

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1. INTRODUCTION
; This reading focuses on a fundamental subject in microeconomics: demand and supply analysis. Demand and supply analysis is the study of how buyers and sellers interact to determine transaction prices and quantities. As we will see, <span>prices simultaneously reflect both the value to the buyer of the next (or marginal) unit and the cost to the seller of that unit. In private enterprise market economies, which are the chief concern of investment analysts, demand and supply analysis encompasses the most basic set of microeconomic tools.

Flashcard 1425607101708

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The [...] deals with the supply of goods and services by profit-maximizing firms.
theory of the firm

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The theory of the firm deals with the supply of goods and services by profit-maximizing firms.

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1. INTRODUCTION
y. The theory of the consumer deals with consumption (the demand for goods and services) by utility-maximizing individuals (i.e., individuals who make decisions that maximize the satisfaction received from present and future consumption). <span>The theory of the firm deals with the supply of goods and services by profit-maximizing firms. The theory of the consumer and the theory of the firm are important because they help us understand the foundations of demand and supply. Subsequent readings will focus on the theory of

Flashcard 1425608674572

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The theory of the firm deals with the [...] by profit-maximizing firms.
supply of goods and services

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The theory of the firm deals with the supply of goods and services by profit-maximizing firms.

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1. INTRODUCTION
y. The theory of the consumer deals with consumption (the demand for goods and services) by utility-maximizing individuals (i.e., individuals who make decisions that maximize the satisfaction received from present and future consumption). <span>The theory of the firm deals with the supply of goods and services by profit-maximizing firms. The theory of the consumer and the theory of the firm are important because they help us understand the foundations of demand and supply. Subsequent readings will focus on the theory of

Flashcard 1425610247436

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The theory of the firm deals with the supply of goods and services by [...]
profit-maximizing firms.

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The theory of the firm deals with the supply of goods and services by profit-maximizing firms.

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1. INTRODUCTION
y. The theory of the consumer deals with consumption (the demand for goods and services) by utility-maximizing individuals (i.e., individuals who make decisions that maximize the satisfaction received from present and future consumption). <span>The theory of the firm deals with the supply of goods and services by profit-maximizing firms. The theory of the consumer and the theory of the firm are important because they help us understand the foundations of demand and supply. Subsequent readings will focus on the theory of

Flashcard 1425611820300

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This reading is organized as follows.

Section 2 explains how [...].

economists classify markets

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This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in

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1. INTRODUCTION
s to converge to an equilibrium price? What are the conditions that would make that equilibrium stable or unstable in response to external shocks? How do different types of auctions affect price discovery? <span>This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in prices and income. A summary and practice problems conclude the reading. <span><body><html>

Flashcard 1425613393164

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This reading is organized as follows.

Section 2 explains how [...]

Section 3 covers the basic principles and concepts of [...] of markets.

Section 4 introduces [...] of demand to changes in prices and income.
economists classify markets.

demand and supply analysis

measures of sensitivity

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This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in prices and income.

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1. INTRODUCTION
s to converge to an equilibrium price? What are the conditions that would make that equilibrium stable or unstable in response to external shocks? How do different types of auctions affect price discovery? <span>This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in prices and income. A summary and practice problems conclude the reading. <span><body><html>

Flashcard 1425614966028

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Question
Reading 13 is organized as follows.

Section 2 explains how economists classify markets.

Section 3 covers the basic principles and concepts of demand and supply analysis of markets.

Section 4 introduces [...] of demand to changes in prices and income.
measures of sensitivity

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This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in prices and income. <span><body><html>

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1. INTRODUCTION
s to converge to an equilibrium price? What are the conditions that would make that equilibrium stable or unstable in response to external shocks? How do different types of auctions affect price discovery? <span>This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in prices and income. A summary and practice problems conclude the reading. <span><body><html>

Flashcard 1425616538892

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Question
This reading is organized as follows.

Section 2 explains how economists classify markets.

Section 3 covers the basic principles and concepts of demand and supply analysis of markets.

Section 4 introduces measures of sensitivity of demand to [...]
changes in prices and income.

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llows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to <span>changes in prices and income. <span><body><html>

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1. INTRODUCTION
s to converge to an equilibrium price? What are the conditions that would make that equilibrium stable or unstable in response to external shocks? How do different types of auctions affect price discovery? <span>This reading is organized as follows. Section 2 explains how economists classify markets. Section 3 covers the basic principles and concepts of demand and supply analysis of markets. Section 4 introduces measures of sensitivity of demand to changes in prices and income. A summary and practice problems conclude the reading. <span><body><html>

Flashcard 1425618111756

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[...] are markets for the purchase and sale of factors of production.

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Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital,

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2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Flashcard 1425619684620

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Factor markets are markets for the purchase and sale of [...]. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).
factors of production

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Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

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2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Annotation 1425621257484

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

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Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

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2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Flashcard 1425622306060

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In capitalist private enterprise economies, [...] own the factors of production.
households

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In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

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2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Flashcard 1425623878924

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In [...] economies, households own the factors of production.
capitalist private enterprise

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In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

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2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Flashcard 1425625451788

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In capitalist private enterprise economies, households own the factors of production (the land, labor, [...] and materials used in production).
physical capital,

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In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

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2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Flashcard 1425627024652

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In capitalist private enterprise economies, factors of production are owned by...
households

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In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

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2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Flashcard 1425628597516

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Factors of production are (the [...], labor, physical capital, and materials used in production).
land

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In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production).

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2. TYPES OF MARKETS
n markets. Investment analysts need at least a basic understanding of those markets and the demand and supply model that provides a framework for analyzing them. Markets are broadly classified as factor markets or goods markets. <span>Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are or

Annotation 1425630170380

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Whenever the perceived value of a good exceeds the expected cost to produce it, a potential trade can take place. This fact may seem obvious, but it is fundamental to our understanding of markets.

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ts for sale when they believe the payment they will receive exceeds their cost of production. Households are willing to purchase goods and services when the value they expect to receive from them exceeds the payment necessary to acquire them. <span>Whenever the perceived value of a good exceeds the expected cost to produce it, a potential trade can take place. This fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off.<span><body><html>

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2. TYPES OF MARKETS
n goods markets: firms are sellers and both households and firms are buyers. For example, firms are buyers of capital goods (such as equipment) and intermediate goods, while households are buyers of a variety of durable and non-durable goods. <span>Generally, market interactions are voluntary. Firms offer their products for sale when they believe the payment they will receive exceeds their cost of production. Households are willing to purchase goods and services when the value they expect to receive from them exceeds the payment necessary to acquire them. Whenever the perceived value of a good exceeds the expected cost to produce it, a potential trade can take place. This fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off. In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisure

Flashcard 1425639345420

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Countries that have large differences between GDP and GNP generally have a large number of [...] (for example, Pakistan and Portugal), and/or pay more for the use of [...] in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada).

foreign-owned capital

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Countries that have large differences between GDP and GNP generally have a large number of citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and

Original toplevel document

2.1. Basic Terminology
NP is that GDP includes, and GNP excludes, the production of goods and services by foreigners within that country, whereas GNP includes, and GDP excludes, the production of goods and services by its citizens outside of the country. <span>Countries that have large differences between GDP and GNP generally have a large number of citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada). Therefore, GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment.

Flashcard 1425640918284

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Countries that have large differences between GDP and GNP generally pay more for the use of [...] in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada).
foreign-owned capital

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Countries that have large differences between GDP and GNP generally have a large number of citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada).

Original toplevel document

2.1. Basic Terminology
NP is that GDP includes, and GNP excludes, the production of goods and services by foreigners within that country, whereas GNP includes, and GDP excludes, the production of goods and services by its citizens outside of the country. <span>Countries that have large differences between GDP and GNP generally have a large number of citizens who work abroad (for example, Pakistan and Portugal), and/or pay more for the use of foreign-owned capital in domestic production than they earn on the capital they own abroad (for example, Brazil and Canada). Therefore, GDP is more widely used as a measure of economic activity occurring within the country, which, in turn, affects employment, growth, and the investment environment.

Annotation 1425642491148

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively.

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The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved becaus

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Flashcard 1425643539724

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The [...] are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively.

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The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively.

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Annotation 1425645112588

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows The terms of trade capture the relative cost of imports in terms of exports.

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The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of e

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Flashcard 1425646161164

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The terms of trade capture the [...] of imports in terms of exports.
relative cost

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The terms of trade capture the relative cost of imports in terms of exports.

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Annotation 1425647734028

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows If the prices of exports increase relative to the prices of imports, the terms of trade have improved

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terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. <span>If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experi

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Flashcard 1425648782604

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If the prices of exports increase relative to the prices of imports, the terms of trade have [...]
improved

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If the prices of exports increase relative to the prices of imports, the terms of trade have improved

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Annotation 1425650355468

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.

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terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. <span>If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order t

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Annotation 1425651928332

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports.

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Open it
For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, <span>if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base ye

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Flashcard 1425652976908

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Question
if the price of exports decreases relative to the price of imports, the terms of trade have [...]
deteriorated

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if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports.

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Flashcard 1425654549772

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Question
if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to [...]
purchase fewer imports with the same amount of exports.

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if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports.

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Annotation 1425656122636

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number

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e same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. <span>Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services.<span></bod

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Flashcard 1425657171212

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Question
Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an [...]
index number

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Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number

Original toplevel document

2.1. Basic Terminology
e to a South African diamond exporter, Britain would classify the cost of the insurance as an export of services to South Africa. Other examples of services exported/imported include engineering, consulting, and medical services. <span>The terms of trade are defined as the ratio of the price of exports to the price of imports, representing those prices by export and import price indices, respectively. The terms of trade capture the relative cost of imports in terms of exports. If the prices of exports increase relative to the prices of imports, the terms of trade have improved because the country will be able to purchase more imports with the same amount of exports.2 For example, when oil prices increased during 2007–2008, major oil exporting countries experienced an improvement in their terms of trade because they had to export less oil in order to purchase the same amount of imported goods. In contrast, if the price of exports decreases relative to the price of imports, the terms of trade have deteriorated because the country will be able to purchase fewer imports with the same amount of exports. Because each country exports and imports a large number of goods and services, the terms of trade of a country are usually measured as an index number (normalized to 100 in some base year) that represents a ratio of the average price of exported goods and services to the average price of imported goods and services. Exhibit 1shows the terms of trade reported in Salvatore (2010). A value over (under) 100 indicates that the country, or group of countries, experienced better (worse) terms of trade rel

Annotation 1425659268364

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows Autarky is a state in which a country does not trade with other countries.

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Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is al

Original toplevel document

2.1. Basic Terminology
e deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. <span>Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries. An open economy , in contrast, is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and service

Flashcard 1425660316940

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[...] is a state in which a country does not trade with other countries.

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Autarky is a state in which a country does not trade with other countries.

Original toplevel document

2.1. Basic Terminology
e deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. <span>Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries. An open economy , in contrast, is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and service

Flashcard 1425661889804

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Autarky is a state in which a country [...]
does not trade with other countries.

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Autarky is a state in which a country does not trade with other countries.

Original toplevel document

2.1. Basic Terminology
e deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. <span>Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries. An open economy , in contrast, is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and service

Annotation 1425663462668

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows The price of a good or service in an economy that does not trade with other countries is called its autarkic price .

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Open it
Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries.

Original toplevel document

2.1. Basic Terminology
e deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. <span>Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries. An open economy , in contrast, is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and service

Flashcard 1425665821964

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The price of a good or service in an economy that does not trade with other countries is called its [...]

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The price of a good or service in an economy that does not trade with other countries is called its autarkic price .

Original toplevel document

2.1. Basic Terminology
e deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. <span>Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries. An open economy , in contrast, is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and service

Annotation 1425668181260

 #cfa-level-1 #economics #economics-in-a-global-context #los #reading-20-international-trade-and-capital-flows An autarkic economy is also known as a closed economy because it does not trade with other countries.

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n>Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries.<span><body><html>

Original toplevel document

2.1. Basic Terminology
e deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. <span>Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries. An open economy , in contrast, is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and service

Flashcard 1425669754124

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An autarkic economy is also known as a [...]

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An autarkic economy is also known as a closed economy because it does not trade with other countries.

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2.1. Basic Terminology
e deficits with that country. Similarly, when a country has a trade deficit, it has to borrow from foreigners or sell some of its assets to foreigners. Section 4 on the balance of payments explains these relationships more fully. <span>Autarky is a state in which a country does not trade with other countries. This means that all goods and services are produced and consumed domestically. The price of a good or service in such an economy is called its autarkic price . An autarkic economy is also known as a closed economy because it does not trade with other countries. An open economy , in contrast, is an economy that trades with other countries. If there are no restrictions on trade, then members of an open economy can buy and sell goods and service

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economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: [...]cs
macroeconomics and microeconomi

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economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and d

Annotation 1425673424140

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 economics is the study of production, distribution, and consumption

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economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and d

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[...] is the study of production, distribution, and consumption

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economics is the study of production, distribution, and consumption

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1. INTRODUCTION
In a general sense, economics is the study of production, distribution, and consumption and can be divided into two broad areas of study: macroeconomics and microeconomics. Macroeconomics deals with aggregate economic quantities, such as national output and national income. Macroeconomics has its roots in microeconomics , which deals with markets and d

Annotation 1425676569868

 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Goods markets are markets for the output of production.

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Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are organizations that buy the services of those factors. Firms

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2. TYPES OF MARKETS
ets. Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). <span>Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are organizations that buy the services of those factors. Firms then transform those services into intermediate or final goods and services. ( Intermediate goods and services are those purchased for use as inputs to produce other goods and services, whereas final goods and services are in the final form purchased by househ

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[...] are markets for the output of production.

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Goods markets are markets for the output of production.

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2. TYPES OF MARKETS
ets. Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). <span>Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are organizations that buy the services of those factors. Firms then transform those services into intermediate or final goods and services. ( Intermediate goods and services are those purchased for use as inputs to produce other goods and services, whereas final goods and services are in the final form purchased by househ

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Goods markets are markets for the [...]
output of production.

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Goods markets are markets for the output of production.

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2. TYPES OF MARKETS
ets. Factor markets are markets for the purchase and sale of factors of production. In capitalist private enterprise economies, households own the factors of production (the land, labor, physical capital, and materials used in production). <span>Goods markets are markets for the output of production. From an economics perspective, firms, which ultimately are owned by individuals either singly or in some corporate form, are organizations that buy the services of those factors. Firms then transform those services into intermediate or final goods and services. ( Intermediate goods and services are those purchased for use as inputs to produce other goods and services, whereas final goods and services are in the final form purchased by househ

Flashcard 1425681026316

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labor markets is when [...] sell their labor [...]
households sell their labor services to firms if payment exceeds the value of the leisure time they must give up.

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In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisure time they must forgo. In contrast, firms hire workers when they

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2. TYPES OF MARKETS
fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off. <span>In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisure time they must forgo. In contrast, firms hire workers when they judge that the value of the productivity of workers is greater than the cost of employing them. A major source of household income and a major cost to firms is compensation paid in exchange for labor services. Additionally, households typically choose to spend less on consumption than they earn from their labor. This behavior is called saving , through which households can accum

Flashcard 1425682599180

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In labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the [...] they must forgo.
leisure time

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In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisure time they must forgo. In contrast, firms hire workers when they judge that the value of the productivity of workers is greater than the cost of employing them. A major source of household in

Original toplevel document

2. TYPES OF MARKETS
fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off. <span>In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisure time they must forgo. In contrast, firms hire workers when they judge that the value of the productivity of workers is greater than the cost of employing them. A major source of household income and a major cost to firms is compensation paid in exchange for labor services. Additionally, households typically choose to spend less on consumption than they earn from their labor. This behavior is called saving , through which households can accum

Article 1425686793484

#cfa-level-1 #economics #los #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4

The candidate should be able to: distinguish among types of markets; explain the principles of demand and supply; describe causes of shifts in and movements along demand and supply curves; describe the process of aggregating demand and supply curves; describe the concept of equilibrium (partial and general), and mechanisms by which markets achieve equilibrium; distinguish between stable and unstable equilibria, including price bubbles, and identify instances of such equilibria; calculate and interpret individual and aggregate demand, and inverse demand and supply functions, and interpret individual and aggregate demand and supply curves; calculate and interpret the amount of excess demand or excess supply associated with a non-equilibrium price; describe types of auctions and calculate the winning price(s) of an auction; calculate and interpret consumer surplus, producer surplus, and total surplus; describe how

Article 1425693609228

3. BASIC PRINCIPLES AND CONCEPTS
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4

In this reading, we will explore a model of household behavior that yields the consumer demand curve. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price. Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve. The demand and supply model is useful in explaining how price and quantity traded are determined and how external influences affect the values of those variables. Buyers’ behavior is captured in the demand function and its graphical equivalent, the demand curve. This curve shows both the highest price buyers are willing to pay for each quantity, and the highest quantity buyers are willing and able to purchase at each price. Sellers’ behavior is captured in the supply function and its graphical equivalent, the supply curve. This curve shows simultaneously the lowest price sellers are willing to ac

Annotation 1425694919948

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 . Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price.

3. BASIC PRINCIPLES AND CONCEPTS
In this reading, we will explore a model of household behavior that yields the consumer demand curve. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price. Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve.

Flashcard 1425695968524

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
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[...] , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price.

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. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price.

Original toplevel document

3. BASIC PRINCIPLES AND CONCEPTS
In this reading, we will explore a model of household behavior that yields the consumer demand curve. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price. Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve.

Flashcard 1425697541388

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Question
. Demand , in economics, is the willingness and ability of consumers to [...] of a good or service at a given price.
purchase a given amount

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. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price.

Original toplevel document

3. BASIC PRINCIPLES AND CONCEPTS
In this reading, we will explore a model of household behavior that yields the consumer demand curve. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price. Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve.

Annotation 1425699114252

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Supply is the willingness of sellers to offer a given quantity of a good or service for a given price

3. BASIC PRINCIPLES AND CONCEPTS
#13; In this reading, we will explore a model of household behavior that yields the consumer demand curve. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price. <span>Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve. The demand and supply model is useful in explaining how price and quantity traded are determined and ho

Flashcard 1425700162828

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Question
[...] is the willingness of sellers to offer a given quantity of a good or service for a given price

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Supply is the willingness of sellers to offer a given quantity of a good or service for a given price

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3. BASIC PRINCIPLES AND CONCEPTS
#13; In this reading, we will explore a model of household behavior that yields the consumer demand curve. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price. <span>Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve. The demand and supply model is useful in explaining how price and quantity traded are determined and ho

Flashcard 1425701735692

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Question
Supply is the willingness of sellers to offer a [...] for a given price
given quantity of a good or service

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Supply is the willingness of sellers to offer a given quantity of a good or service for a given price

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3. BASIC PRINCIPLES AND CONCEPTS
#13; In this reading, we will explore a model of household behavior that yields the consumer demand curve. Demand , in economics, is the willingness and ability of consumers to purchase a given amount of a good or service at a given price. <span>Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve. The demand and supply model is useful in explaining how price and quantity traded are determined and ho

Annotation 1425703308556

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 The demand and supply model is useful in explaining how price and quantity traded are determined and how external influences affect the values of those variables. Buyers’ behavior is captured in the demand function and its graphical equivalent, the demand curve. This curve shows both the highest price buyers are willing to pay for each quantity, and the highest quantity buyers are willing and able to purchase at each price. Sellers’ behavior is captured in the supply function and its graphical equivalent, the supply curve. This curve shows simultaneously the lowest price sellers are willing to accept for each quantity and the highest quantity sellers are willing to offer at each price

3. BASIC PRINCIPLES AND CONCEPTS
se a given amount of a good or service at a given price. Supply is the willingness of sellers to offer a given quantity of a good or service for a given price. Later, study on the theory of the firm will yield the supply curve. <span>The demand and supply model is useful in explaining how price and quantity traded are determined and how external influences affect the values of those variables. Buyers’ behavior is captured in the demand function and its graphical equivalent, the demand curve. This curve shows both the highest price buyers are willing to pay for each quantity, and the highest quantity buyers are willing and able to purchase at each price. Sellers’ behavior is captured in the supply function and its graphical equivalent, the supply curve. This curve shows simultaneously the lowest price sellers are willing to accept for each quantity and the highest quantity sellers are willing to offer at each price. If, at a given quantity, the highest price that buyers are willing to pay is equal to the lowest price that sellers are willing to accept, we say the market has reached it

Annotation 1425704881420

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 If, at a given quantity, the highest price that buyers are willing to pay is equal to the lowest price that sellers are willing to accept, we say the market has reached its equilibrium quantity.

3. BASIC PRINCIPLES AND CONCEPTS
supply function and its graphical equivalent, the supply curve. This curve shows simultaneously the lowest price sellers are willing to accept for each quantity and the highest quantity sellers are willing to offer at each price. <span>If, at a given quantity, the highest price that buyers are willing to pay is equal to the lowest price that sellers are willing to accept, we say the market has reached its equilibrium quantity. Alternatively, when the quantity that buyers are willing and able to purchase at a given price is just equal to the quantity that sellers are willing to offer at that same price, we say

Annotation 1425706454284

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 equilibrium price and quantity are achieved simultaneously, and as long as neither the supply curve nor the demand curve shifts, there is no tendency for either price or quantity to vary from their equilibrium values.

3. BASIC PRINCIPLES AND CONCEPTS
ity. Alternatively, when the quantity that buyers are willing and able to purchase at a given price is just equal to the quantity that sellers are willing to offer at that same price, we say the market has discovered the equilibrium price. So <span>equilibrium price and quantity are achieved simultaneously, and as long as neither the supply curve nor the demand curve shifts, there is no tendency for either price or quantity to vary from their equilibrium values. <span><body><html>

Article 1425708027148

3.1. The Demand Function and the Demand Curve
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4

We first analyze demand. The quantity consumers are willing to buy clearly depends on a number of different factors called variables. Perhaps the most important of those variables is the item’s own price. In general, economists believe that as the price of a good rises, buyers will choose to buy less of it, and as its price falls, they buy more. This is such a ubiquitous observation that it has come to be called the law of demand , although we shall see that it need not hold in all circumstances. Although a good’s own price is important in determining consumers’ willingness to purchase it, other variables also have influence on that decision, such as consumers’ incomes, their tastes and preferences, the prices of other goods that serve as substitutes or complements, and so on. Economists attempt to capture all of these influences in a relationship called the demand function . (In general, a function is a relationship that assigns a unique value to a dependent variable for any given set of values

Annotation 1425709337868

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 We first analyze demand. The quantity consumers are willing to buy clearly depends on a number of different factors called variables. Perhaps the most important of those variables is the item’s own price.

3.1. The Demand Function and the Demand Curve
We first analyze demand. The quantity consumers are willing to buy clearly depends on a number of different factors called variables. Perhaps the most important of those variables is the item’s own price. In general, economists believe that as the price of a good rises, buyers will choose to buy less of it, and as its price falls, they buy more. This is such a ubiquitous observation that

Annotation 1425710910732

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 In general, economists believe that as the price of a good rises, buyers will choose to buy less of it, and as its price falls, they buy more. This is such a ubiquitous observation that it has come to be called the law of demand , although we shall see that it need not hold in all circumstances.

3.1. The Demand Function and the Demand Curve
head> We first analyze demand. The quantity consumers are willing to buy clearly depends on a number of different factors called variables. Perhaps the most important of those variables is the item’s own price. In general, economists believe that as the price of a good rises, buyers will choose to buy less of it, and as its price falls, they buy more. This is such a ubiquitous observation that it has come to be called the law of demand , although we shall see that it need not hold in all circumstances. Although a good’s own price is important in determining consumers’ willingness to purchase it, other variables also have influence on that decision, such as consumers’ inco

Annotation 1425712483596

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Although a good’s own price is important in determining consumers’ willingness to purchase it, other variables also have influence on that decision, such as consumers’ incomes, their tastes and preferences, the prices of other goods that serve as substitutes or complements, and so on. Economists attempt to capture all of these influences in a relationship called the demand function .

3.1. The Demand Function and the Demand Curve
yers will choose to buy less of it, and as its price falls, they buy more. This is such a ubiquitous observation that it has come to be called the law of demand , although we shall see that it need not hold in all circumstances. <span>Although a good’s own price is important in determining consumers’ willingness to purchase it, other variables also have influence on that decision, such as consumers’ incomes, their tastes and preferences, the prices of other goods that serve as substitutes or complements, and so on. Economists attempt to capture all of these influences in a relationship called the demand function . (In general, a function is a relationship that assigns a unique value to a dependent variable for any given set of values of a group of independent variables.) We represent such a deman

Annotation 1425714056460

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 In general, a function is a relationship that assigns a unique value to a dependent variable for any given set of values of a group of independent variables.

3.1. The Demand Function and the Demand Curve
n, such as consumers’ incomes, their tastes and preferences, the prices of other goods that serve as substitutes or complements, and so on. Economists attempt to capture all of these influences in a relationship called the demand function . (<span>In general, a function is a relationship that assigns a unique value to a dependent variable for any given set of values of a group of independent variables.) We represent such a demand function in Equation 1: Equation (1)  Qdx=f(Px,I,Py,...) where Qdx represents the quantity demanded of some good X (su

Annotation 1425715629324

 Demand Function #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Equation (1)  Qdx=f(Px,I,Py,...) Qdx = the quantity demanded of some good X (e.g. per household demand for gasoline in gallons per week), Px = Price of good X I = consumers’ income Py is the price of another good, Y. It may be read, “Quantity demanded of good X depends on (is a function of) the price of good X, consumers’ income, the price of good Y, and so on.”

3.1. The Demand Function and the Demand Curve
demand function . (In general, a function is a relationship that assigns a unique value to a dependent variable for any given set of values of a group of independent variables.) We represent such a demand function in Equation 1: <span>Equation (1)  Qdx=f(Px,I,Py,...) where Qdx represents the quantity demanded of some good X (such as per household demand for gasoline in gallons per week), P x is the price per unit of good X (such as $per gallon), I is consumers’ income (as in$1,000s per household annually), and P y is the price of another good, Y. (There can be many other goods, not just one, and they can be complements or substitutes.) Equation 1 may be read, “Quantity demanded of good X depends on (is a function of) the price of good X, consumers’ income, the price of good Y, and so on.” Often, economists use simple linear equations to approximate real-world demand and supply functions in relevant ranges. A hypothetical example of a specific demand function

Annotation 1425717988620

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Often, economists use simple linear equations to approximate real-world demand and supply functions in relevant ranges. A hypothetical example of a specific demand function could be the following linear equation for a small town’s per-household gasoline consumption per week, where Py might be the average price of an automobile in $1,000s: Equation (2) Qdx=8.4−0.4Px+0.06I−0.01Py The signs of the coefficients on gasoline price (negative) and consumer’s income (positive) are intuitive, reflecting, respectively, an inverse and a positive relationship between those variables and quantity of gasoline consumed. The negative sign on average automobile price may indicate that if automobiles go up in price, fewer will be purchased and driven; hence less gasoline will be consumed. As will be discussed later, such a relationship would indicate that gasoline and automobiles have a negative cross-price elasticity of demand and are thus complements. status not read 3.1. The Demand Function and the Demand Curve y other goods, not just one, and they can be complements or substitutes.) Equation 1 may be read, “Quantity demanded of good X depends on (is a function of) the price of good X, consumers’ income, the price of good Y, and so on.” <span>Often, economists use simple linear equations to approximate real-world demand and supply functions in relevant ranges. A hypothetical example of a specific demand function could be the following linear equation for a small town’s per-household gasoline consumption per week, where P y might be the average price of an automobile in$1,000s: Equation (2)  Qdx=8.4−0.4Px+0.06I−0.01Py The signs of the coefficients on gasoline price (negative) and consumer’s income (positive) are intuitive, reflecting, respectively, an inverse and a positive relationship between those variables and quantity of gasoline consumed. The negative sign on average automobile price may indicate that if automobiles go up in price, fewer will be purchased and driven; hence less gasoline will be consumed. As will be discussed later, such a relationship would indicate that gasoline and automobiles have a negative cross-price elasticity of demand and are thus complements. To continue our example, suppose that the price of gasoline (P x ) is $3 per gallon, per household income (I) is$50,000, and the price of the average automobile (P y ) is

Annotation 1425719561484

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 To continue our example, suppose that the price of gasoline (Px) is $3 per gallon, per household income (I) is$50,000, and the price of the average automobile (Py) is $20,000. Then this function would predict that the per-household weekly demand for gasoline would be 10 gallons: 8.4 − 0.4(3) + 0.06(50) − 0.01(20) = 8.4 − 1.2 + 3 − 0.2 = 10, recalling that income and automobile prices are measured in thousands. Note that the sign on the own-price variable is negative, thus, as the price of gasoline rises, per household weekly consumption would decrease by 0.4 gallons for every dollar increase in gas price. Own-price is used by economists to underscore that the reference is to the price of a good itself and not the price of some other good. status not read 3.1. The Demand Function and the Demand Curve e purchased and driven; hence less gasoline will be consumed. As will be discussed later, such a relationship would indicate that gasoline and automobiles have a negative cross-price elasticity of demand and are thus complements. <span>To continue our example, suppose that the price of gasoline (P x ) is$3 per gallon, per household income (I) is $50,000, and the price of the average automobile (P y ) is$20,000. Then this function would predict that the per-household weekly demand for gasoline would be 10 gallons: 8.4 − 0.4(3) + 0.06(50) − 0.01(20) = 8.4 − 1.2 + 3 − 0.2 = 10, recalling that income and automobile prices are measured in thousands. Note that the sign on the own-price variable is negative, thus, as the price of gasoline rises, per household weekly consumption would decrease by 0.4 gallons for every dollar increase in gas price. Own-price is used by economists to underscore that the reference is to the price of a good itself and not the price of some other good. In our example, there are three independent variables in the demand function, and one dependent variable. If any one of the independent variables changes, so does the value

Annotation 1425721134348

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 In our example, there are three independent variables in the demand function, and one dependent variable. If any one of the independent variables changes, so does the value of quantity demanded. It is often desirable to concentrate on the relationship between the dependent variable and just one of the independent variables at a time, which allows us to represent the relationship between those two variables in a two-dimensional graph (at specific levels of the variables held constant). To accomplish this goal, we can simply hold the other two independent variables constant at their respective levels and rewrite the equation. In economic writing, this “holding constant” of the values of all variables except those being discussed is traditionally referred to by the Latin phrase ceteris paribus (literally, “all other things being equal” in the sense of “unchanged”). In this reading, we will use the phrase “holding all other things constant” as a readily understood equivalent for ceteris paribus.

3.1. The Demand Function and the Demand Curve
ld weekly consumption would decrease by 0.4 gallons for every dollar increase in gas price. Own-price is used by economists to underscore that the reference is to the price of a good itself and not the price of some other good. <span>In our example, there are three independent variables in the demand function, and one dependent variable. If any one of the independent variables changes, so does the value of quantity demanded. It is often desirable to concentrate on the relationship between the dependent variable and just one of the independent variables at a time, which allows us to represent the relationship between those two variables in a two-dimensional graph (at specific levels of the variables held constant). To accomplish this goal, we can simply hold the other two independent variables constant at their respective levels and rewrite the equation. In economic writing, this “holding constant” of the values of all variables except those being discussed is traditionally referred to by the Latin phrase ceteris paribus (literally, “all other things being equal” in the sense of “unchanged”). In this reading, we will use the phrase “holding all other things constant” as a readily understood equivalent for ceteris paribus. Suppose, for example, that we want to concentrate on the relationship between the quantity demanded of the good and its own-price, P x . Then we would hold constant the val

Annotation 1425722707212

 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Suppose, for example, that we want to concentrate on the relationship between the quantity demanded of the good and its own-price, Px. Then we would hold constant the values of income and the price of good Y. In our example, those values are 50 and 20, respectively. So, by inserting the respective values, we would rewrite Equation 2 as Equation (3)  Qdx=8.4−0.4Px+0.06(50)−0.01(20)=11.2−0.4Px

3.1. The Demand Function and the Demand Curve
n phrase ceteris paribus (literally, “all other things being equal” in the sense of “unchanged”). In this reading, we will use the phrase “holding all other things constant” as a readily understood equivalent for ceteris paribus. <span>Suppose, for example, that we want to concentrate on the relationship between the quantity demanded of the good and its own-price, P x . Then we would hold constant the values of income and the price of good Y. In our example, those values are 50 and 20, respectively. So, by inserting the respective values, we would rewrite Equation 2 as Equation (3)  Qdx=8.4−0.4Px+0.06(50)−0.01(20)=11.2−0.4Px Notice that income and the price of automobiles are not ignored; they are simply held constant, and they are “collected” in the new constant term, 11.2. Notice also that we

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 #cfa #cfa-level-1 #demand-function-and-demand-curve #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Qdx=8.4−0.4Px+0.06(50)−0.01(20)=11.2−0.4Px Notice that income and the price of automobiles are not ignored; they are simply held constant, and they are “collected” in the new constant term, 11.2. Notice also that we can rearrange Equation 3, solving for Px in terms of Qx. This operation is called “inverting the demand function,” and gives us Equation 4. (You should be able to perform this algebraic exercise to verify the result.) Equation (4)  Px = 28 – 2.5Qx   Equation 4, which gives the per-gallon price of gasoline as a function of gasoline consumed per week, is referred to as the inverse demand function . We need to restrict Qx in Equation 4 to be less than or equal to 11.2 so price is not negative. Henceforward we assume that the reader can work out similar needed qualifications to the valid application of equations. The graph of the inverse demand function is called the demand curve , and is shown in Exhibit 1.1

3.1. The Demand Function and the Demand Curve
Then we would hold constant the values of income and the price of good Y. In our example, those values are 50 and 20, respectively. So, by inserting the respective values, we would rewrite Equation 2 as Equation (3)  <span>Qdx=8.4−0.4Px+0.06(50)−0.01(20)=11.2−0.4Px Notice that income and the price of automobiles are not ignored; they are simply held constant, and they are “collected” in the new constant term, 11.2. Notice also that we can rearrange Equation 3, solving for P x in terms of Q x . This operation is called “inverting the demand function,” and gives us Equation 4. (You should be able to perform this algebraic exercise to verify the result.) Equation (4)  P x = 28 – 2.5Q x   Equation 4, which gives the per-gallon price of gasoline as a function of gasoline consumed per week, is referred to as the inverse demand function . We need to restrict Q x in Equation 4 to be less than or equal to 11.2 so price is not negative. Henceforward we assume that the reader can work out similar needed qualifications to the valid application of equations. The graph of the inverse demand function is called the demand curve , and is shown in Exhibit 1.1 Exhibit 1. Household Demand Curve for Gasoline This demand curve is drawn with price on the vertical axis and quantity on the horizontal

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 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Exhibit 1. Household Demand Curve for Gasoline This demand curve is drawn with price on the vertical axis and quantity on the horizontal axis. Depending on how we interpret it, the demand curve shows either the highest quantity a household would buy at a given price or the highest price it would be willing to pay for a given quantity. In our example, at a price of $3 per gallon households would each be willing to buy 10 gallons per week. Alternatively, the highest price they would be willing to pay for 10 gallons per week is$3 per gallon. Both interpretations are valid, and we will be thinking in terms of both as we proceed. If the price were to rise by $1, households would reduce the quantity they each bought by 0.4 units to 9.6 gallons. We say that the slope of the demand curve is 1/−0.4, or –2.5. Slope is always measured as “rise over run,” or the change in the vertical variable divided by the change in the horizontal variable. In this case, the slope of the demand curve is ΔP/ΔQ, where “Δ” stands for “the change in.” The change in price was$1, and it is associated with a change in quantity of negative 0.4

3.1. The Demand Function and the Demand Curve
ive. Henceforward we assume that the reader can work out similar needed qualifications to the valid application of equations. The graph of the inverse demand function is called the demand curve , and is shown in Exhibit 1.1 <span>Exhibit 1. Household Demand Curve for Gasoline This demand curve is drawn with price on the vertical axis and quantity on the horizontal axis. Depending on how we interpret it, the demand curve shows either the highest quantity a household would buy at a given price or the highest price it would be willing to pay for a given quantity. In our example, at a price of $3 per gallon households would each be willing to buy 10 gallons per week. Alternatively, the highest price they would be willing to pay for 10 gallons per week is$3 per gallon. Both interpretations are valid, and we will be thinking in terms of both as we proceed. If the price were to rise by $1, households would reduce the quantity they each bought by 0.4 units to 9.6 gallons. We say that the slope of the demand curve is 1/−0.4, or –2.5. Slope is always measured as “rise over run,” or the change in the vertical variable divided by the change in the horizontal variable. In this case, the slope of the demand curve is ΔP/ΔQ, where “Δ” stands for “the change in.” The change in price was$1, and it is associated with a change in quantity of negative 0.4 <span><body><html>

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 #cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 Inverse demand function is a restatement of the demand function in which price is stated as a function of quantity.

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4

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 #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 a change in the (own) price of a product causes a change in the quantity of that good willingly supplied. A rise in price typically results in a greater quantity supplied, and a lower price results in a lower quantity supplied. Hence, the supply curve has a positive slope, in contrast to the negative slope of a demand curve. This positive relationship is often referred to as the law of supply .