Economics

• The market structure is determined by the number of firms, their size relative to total industry output, and the degree of competition.
• The equilibrium price and quantity occur at the intersection of the supply and demand curves.
• Market failure occurs when there are externalities or public goods that cannot be provided through private markets alone.
• Government intervention can address market failures through regulation, subsidies, taxes, and other policies.
• Economic growth refers to an increase in real GDP over time.
• Income inequality refers to differences in income between individuals or groups within a society.
• Factors contributing to economic growth include capital accumulation (investments), technological progress, labor force participation, and human capital formation.
• Poverty is defined as living below a certain level of income or standard of living.
• Causes of poverty include lack of access to education, healthcare, housing, employment opportunities, and financial services.
• Factors contributing to income inequality include education level, gender, race/ethnicity, age, geographic location, occupation, and family structure.
• Unemployment refers to the condition where people who want work cannot find it.
• Absolute poverty refers to not having enough resources to meet basic needs, while relative poverty refers to being significantly lower than the average income in a country.
• The impact of income inequality on the economy includes reduced consumer spending power, decreased social mobility, increased crime rates, political instability, and lower levels of trust among citizens.
• Market failure occurs when markets do not allocate resources efficiently due to externalities, public goods, monopoly power, asymmetric information, and transaction costs.
• Government policies can address income inequality by implementing progressive taxation, providing targeted subsidies and benefits, increasing access to quality education and training programs, promoting equal pay laws, strengthening unions, and improving working conditions.
• Frictional unemployment arises from the time it takes for workers to search for jobs and employers to fill vacancies.
• Economic development involves increasing productivity, improving infrastructure, promoting entrepreneurship, investing in education and training, reducing corruption, and implementing sound macroeconomic policies.
• There are two types of economic systems - market economies and planned economies.
• Economic growth is measured using Gross Domestic Product (GDP), which represents the total value of all final goods and services produced within a country's borders during a specific period.
• Cyclical unemployment is linked to fluctuations in economic activity and occurs during recessions.
• Structural unemployment is caused by changes in technology or industry structure that result in job losses.
• Monetary policy tools include open market operations, reserve requirements, discount rate, and interest rate targeting.
• A free-market system allows prices to be determined through supply and demand without government intervention or regulation.
• An example of a mixed economy is the United States, where there is a combination of private enterprise and government control over certain industries such as healthcare and transportation.
• The circular flow diagram shows how money flows between households, firms, government, and foreign countries in an economy.
• The economy can be divided into four sectors: primary sector, secondary sector, tertiary sector, and quaternary sector.
• Fiscal policy refers to government spending and taxation decisions aimed at influencing aggregate demand and output levels.
• A recession is a significant decline in economic activity lasting more than a few months, typically characterized by negative gross domestic product (GDP) growth, rising unemployment rates, falling consumer confidence, and declining business investment.
• The law of diminishing returns states that as more resources are added to production beyond an optimal level, marginal productivity decreases.
• The Federal Reserve System is responsible for implementing monetary policy in the US.
• Income tax is used to fund public goods and services provided by the government.
• Progressive income taxes are based on ability to pay and have higher rates for high earners.
• Regressive income taxes have lower rates for low earners and higher rates for high earners.
• Marginal cost is the additional cost associated with producing one extra unit of a good or service.
• Nominal GDP measures the total value of all final goods and services produced within a country's borders during a specific period, expressed in current prices.
• Proportional income taxes apply the same rate across all income brackets.
• Flat-rate income taxes charge everyone the same amount regardless of their income level.
• Sales taxes are levied on purchases made within a jurisdiction and can be regressive or proportional depending on the specific tax structure.
• Average total cost (ATC) is calculated by dividing total costs by output.
• Diseconomies of scale occur when average total costs increase as output increases due to factors such as congestion and management problems.