# on 29-Dec-2016 (Thu)

#### Flashcard 1425538157836

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When a country has a trade surplus, it [...] to foreigners or [...]
lends 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 def

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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 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 1429290224908

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#means-of-communication #sister-miriam-joseph #special-or-common #symbols #the-function-of-language #trivium
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Basic English is a careful selection of [...] English words, which through paraphrase are designed to do duty for a wider vocabulary
850

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Two attempts to provide an international language may be mentioned. Esperanto is an artificial amalgam based on words common to the chief European languages. Basic English is a careful selection of 850 English words, which through paraphrase are designed to do duty for a wider vocabulary

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#### Flashcard 1429327973644

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#sister-miriam-joseph #trivium
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The theory of space includes analytic geometry and trigonometry. Applications of the theory of space include principles of architecture, geography, surveying, and [...]
engineering.

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f chemistry, and other forms of scientific measurement of discrete quantities. The theory of space includes analytic geometry and trigonometry. Applications of the theory of space include principles of architecture, geography, surveying, and <span>engineering.<span><body><html>

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#### Flashcard 1430452571404

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#derecho #introduccion-al-derecho
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Las normas se clasifican en: [...], [...] , sociales y jurídicas
morales

religiosas

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Las normas se clasifican en: morales, religiosas, sociales y jurídicas

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Normas y asi
1.3.2 Tipos de normas Las normas se clasifican en: morales, religiosas, sociales y jurídicas, como se explica en las siguientes secciones. 1.3.2.1 Normas morales Son reglas de conducta que provienen de nuestro interior, ya

#### Flashcard 1430470397196

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
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So anything that improves dissemination of information about buyers’ and sellers’ willingness to exchange goods can [...].

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d><head>In effect, any impediment in the dissemination of information about buyers’ and sellers’ willingness to exchange goods can cause an imbalance in demand and supply. So anything that improves that information flow can add value. In that sense, advertising can add value to the extent that it informs potential buyers of the availability of goods and services.<html>

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3.13. Market Interference: The Negative Impact on Total Surplus
provide value in the transaction, and for that value they are able to charge a brokerage fee. Although the brokerage fee could certainly be viewed as a transactions cost, it is really a price charged for the service of reducing search costs. <span>In effect, any impediment in the dissemination of information about buyers’ and sellers’ willingness to exchange goods can cause an imbalance in demand and supply. So anything that improves that information flow can add value. In that sense, advertising can add value to the extent that it informs potential buyers of the availability of goods and services. <span><body><html>

#### Flashcard 1430494776588

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
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One study found that income elasticity of demand for beer is slightly [...], whereas income elasticity of demand for wine is significantly [...] .

An economist would therefore say that beer is inferior whereas wine is normal
negative

positive

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One study found that income elasticity of demand for beer is slightly negative, whereas income elasticity of demand for wine is significantly positive. An economist would therefore say that beer is inferior whereas wine is normal

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4.3. Income Elasticity of Demand: Normal and Inferior Goods
income elasticity of demand for that good is observed to be negative. It does not necessarily indicate anything at all about the quality of that good. Typical examples of inferior goods might be rice, potatoes, or less expensive cuts of meat. <span>One study found that income elasticity of demand for beer is slightly negative, whereas income elasticity of demand for wine is significantly positive. An economist would therefore say that beer is inferior whereas wine is normal. Ultimately, whether a good is called inferior or normal is simply a matter of empirical statistical analysis. And a good could be normal for one income group and inferior for another i

#### Flashcard 1430528593164

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
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Another [...] variation, also involving a single price and called a single price auction , is used in selling US Treasury securities.
Dutch auction

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Another Dutch auction variation, also involving a single price and called a single price auction , is used in selling US Treasury securities.6The single price Treasury bill auction operates as follows: The T

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3.8. Auctions as a Way to Find Equilibrium Price
continue to qualify bids at higher prices until 3 million shares had been qualified. In our example, that price might be €27. Shareholders who bid between €26 and €27, inclusive, would then be paid €27 per share for their shares. <span>Another Dutch auction variation, also involving a single price and called a single price auction , is used in selling US Treasury securities.6The single price Treasury bill auction operates as follows: The Treasury announces that it will auction 26-week T-bills with an offering amount of, say, $90 billion with both competitive and non-competitive bidding. Non-competitive bidders state the total face value they are willing to purchase at the ultimate price (yield) that clears the market (i.e., sells all of the securities offered), whatever that turns out to be. Competitive bidders each submit a total face value amount and the price at which they are willing to purchase those bills. The Treasury then ranks those bids in ascending order of yield (i.e., descending order of price) and finds the yield at which the total$90 billion offering amount would be sold. If the offering amount is just equal to the total face value bidders are willing to purchase at that yield, then all the T-bills are sold for that single yield. If there is excess demand at that yield, then bidders would each receive a proportionately smaller total than they offered. As an example, suppose the following table shows the prices and the offers from competitive bidders for a variety of prices, as well as the total offers from non-competitiv

#### Flashcard 1435551796492

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#cfa #cfa-level-1 #economics #lol #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
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When managers of for-profit companies have been surveyed about the objectives of the companies they direct, researchers have often concluded that

a) companies frequently have [...]

multiple objectives;

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When managers of for-profit companies have been surveyed about the objectives of the companies they direct, researchers have often concluded that a) companies frequently have multiple objectives; b) objectives can often be classified as focused on profitability (e.g., maximizing profits, increasing market share) or on controlling risk (e.g., survival, stable earnings

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2. OBJECTIVES OF THE FIRM
be known with certainty (i.e., the theory of the firm under conditions of certainty). The main contrast of this type of analysis is to the theory of the firm under conditions of uncertainty, where prices, and therefore profit, are uncertain. <span>Under market uncertainty, a range of possible profit outcomes is associated with the firm’s decision to produce a given quantity of goods or services over a specific time period. Such complex theory typically makes simplifying assumptions. When managers of for-profit companies have been surveyed about the objectives of the companies they direct, researchers have often concluded that a) companies frequently have multiple objectives; b) objectives can often be classified as focused on profitability (e.g., maximizing profits, increasing market share) or on controlling risk (e.g., survival, stable earnings growth); and c) managers in different countries may have different emphases. Finance experts frequently reconcile profitability and risk objectives by stating that the objective of the firm is, or should be, shareholder wealth maximization (i.e.,

#### Flashcard 1435572505868

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#cfa #cfa-level-1 #economics #lol #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
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The characteristics of the [...] market and of the [...] market, play an important role in the determination of profit.
product

resource

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The characteristics of the product market, where the firm sells its output or services, and of the resource market, where the firm purchases resources, play an important role in the determination of profit.

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2. OBJECTIVES OF THE FIRM
Π = TR – TC where Π is profit, TR is total revenue, and TC is total costs. TC can be defined as accounting costs or economic costs, depending on the objectives and requirements of the analyst for evaluating profit. <span>The characteristics of the product market, where the firm sells its output or services, and of the resource market, where the firm purchases resources, play an important role in the determination of profit. Key variables that determine TC are the level of output, the firm’s efficiency in producing that level of output when utilizing inputs, and resource prices as established by resource ma

#### Flashcard 1435574865164

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#cfa #cfa-level-1 #economics #lol #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
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Key variables that determine TC are the level of output, the firm’s [...] when utilizing inputs, and resource prices as established by resource markets.
efficiency in producing that level of output

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Key variables that determine TC are the level of output, the firm’s efficiency in producing that level of output when utilizing inputs, and resource prices as established by resource markets.

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2. OBJECTIVES OF THE FIRM
the analyst for evaluating profit. The characteristics of the product market, where the firm sells its output or services, and of the resource market, where the firm purchases resources, play an important role in the determination of profit. <span>Key variables that determine TC are the level of output, the firm’s efficiency in producing that level of output when utilizing inputs, and resource prices as established by resource markets. TR is a function of output and product price as determined by the firm’s product market. 2.1. Types of Profit Measures The economics discipline has its

#### Flashcard 1435594525964

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#2-1-types-of-profit-measures #cfa #cfa-level-1 #economics #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
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[...] is generally defined as net income reported on the income statement according to certain standards.

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Accounting profit is generally defined as net income reported on the income statement according to standards established by private and public financial oversight bodies that determine the rules for fina

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2. OBJECTIVES OF THE FIRM

#### Flashcard 1435598458124

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#2-1-types-of-profit-measures #cfa #cfa-level-1 #economics #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
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Accounting or explicit costs are [...] to [...] parties for [...] supplied to the firm.
payments to non-owner

services or resources

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Accounting or explicit costs are payments to non-owner parties for services or resources that they supply to the firm.

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2. OBJECTIVES OF THE FIRM
he firm’s efficiency in producing that level of output when utilizing inputs, and resource prices as established by resource markets. TR is a function of output and product price as determined by the firm’s product market. <span>2.1. Types of Profit Measures The economics discipline has its own concept of profit, which differs substantially from what accountants consider profit. There are thus two basic types of profit—accounting and economic—and analysts need to be able to interpret each correctly and to understand how they are related to each other. In the theory of the firm, however, profit without further qualification refers to economic profit. 2.1.1. Accounting Profit Accounting profit is generally defined as net income reported on the income statement according to standards established by private and public financial oversight bodies that determine the rules for financial reporting. One widely accepted definition of accounting profit—also known as net profit, net income, or net earnings—states that it equals revenue less all accounting (or explicit) costs . Accounting or explicit costs are payments to non-owner parties for services or resources that they supply to the firm. Often referred to as the “bottom line” (the last income figure in the income statement), accounting profit is what is left after paying all accounting costs—whether the expense is a cash outlay or not. When accounting profit is negative, it is called an accounting loss . Equation 2 summarizes the concept of accounting profit: Equation (2)  Accounting profit = Total revenue – Total accounting costs When defining profit as accounting profit, the TC term in Equation 1 becomes total accounting costs, which include only the explicit costs of doing business. Let us consider two businesses: a start-up company and a publicly traded corporation. Suppose that for the start-up, total revenue in the business’s first year is €3,500,000 and total accounting costs are €3,200,000. Accounting profit is €3,500,000 – €3,200,000 = €300,000. The corresponding calculation for the publicly traded corporation, let us suppose, is $50,000,000 –$48,000,000 = \$2,000,000. Note that total accounting costs in either case include interest expense—which represents the return required by suppliers of debt capital—because interest expense is an explicit cost. 2.1.2. Economic Profit and Normal Profit Economic profit (also known as abnormal profit or supernormal profit ) may be defined broadly as acc