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UTIL: An hypothetical, as in totally fabricated, unit of measurement for utility that's used by economists to present hypothetical information about utility and consumer demand theory. Economists are fond of making up hypothetical stuff, especially if it drives home an important economic notion. In this case, the term "util" (also frequently used in plural as "utils") is a convenient way to discuss utility and the satisfaction of wants and needs that consumers obtain from consuming or using a good.
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Lesson 1: Economic Basics | Unit 3: The Economy
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Page: 9 of 18
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Topic:
A Mixed Economy: The Mix
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A pure market economy and a pure command economy are two theoretical extremes in the allocation of resources. - Real world economies form a continuum bounded by these two extremes. They are mixed economies:
- A mixed economy is one that relies on both markets and government to allocate resources.
- Market-oriented economies, also called capitalism, are mixed economies that lean heavily to the market end.
- Socialism and communism are mixed economies that lean more (a lot more) toward government control.
The mixed U.S. economy leans heavily to the market end of the market-government continuum.
Three indicators of government involvement:- Taxes: Government controls about 1/3 of the revenue generated in the economy each year.
- Spending: Government buys 20% of the goods produced each year.
- Regulations: Government influences many allocation decisions through laws, rules, and other restrictions.
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PERFECT COMPETITION, LONG-RUN ADJUSTMENT A perfectly competitive industry undertakes a two-part adjustment to equilibrium in the long run. One is the adjustment of each perfectly competitive firm to the appropriate factory size that maximizes long-run profit. The other is the entry of firms into the industry or exit of firms out of the industry, to eliminate economic profit or economic loss. The end result of this long-run adjustment is a multi-faceted equilibrium condition that price is equal to marginal cost and average cost (both short run and long run).
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time flipping through mail order catalogs trying to buy either a coffee cup commemorating the moon landing or a how-to book on surfing the Internet. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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Junk bonds are so called because they have a better than 50% chance of default, carrying a Standard & Poor's rating of CC or lower.
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"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. " -- Steve Jobs, Apple Computer founder
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CPI-W
Consumer Price Index-Urban Wage Earners and Clerical Workers
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