What is an aggregate? How is it used in macroeconomics? Give two examples of specific aggregates that are used in the study of macroeconomics
An "aggregate" is an abstraction that macroeconomists find convenient to use in describing some important feature of the overall economy. Aggregates are used in macroeconomics as simplifications to focus on the total of economic activity in contrast to the activity of one part of the economy. The aggregates described in the text were Gross Domestic Product (the sum of the total production of the nation's economy); aggregate demand (the sum of total demand for all the final goods and services); aggregate supply (the sum total of all the output offered for sale at various price levels); and the price level or price index (a number that serves as a measure of the average price of all final goods and services in the economy for some time period).
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In a competitive market, prices adjust until all consumers find themselves
A) maximizing utility. B) on the contract curve. C) happy with their original endowment. D) with many opportunities to gain from additional exchange.
Markets that exhibit economies of scale over the entire range of market output
A. Are perfectly competitive. B. Have upward-sloping long-run average total cost curves. C. Are natural monopolies. D. Have downward-sloping short-run average total cost curves.
_____ goods are rivalrous in consumption and excludable
Fill in the blank(s) with the appropriate word(s).
By holding insurance a person
a. reduces the risk of a bad outcome, such as their house burning down. b. shares risk and so reduces the burden of risk. c. Both A and B are correct. d. Neither A nor B are correct.