BUSINESS CYCLE
The business cycle is represented by periods of growth and recession in the economy. It can be demonstrated in terms of long-term and short term growth. These periods of growth and recession are demonstrated using the country’s real gross domestic product (GDP) as its base.
Real GDP is the measurement of overall output of the economy in real terms, meaning it has been adjusted for inflation. When the country’s economy is in a problem spot, then the GDP shrinks. When the country is at the level of full employment, then the GDP grows.
The relationship between the business cycle and GDP growth is an element of modern capitalism. For an economy to be healthy, there will always be periods of growth and periods of recession. The severity of the growth and recession is a subject of real debate, especially in current politics.
The trend of the business cycle and unemployment are closely related. During times of economic recession unemployment will increase and the opposite will happen during times of recovery. However, the recession usually is not a cause of unemployment. Unemployment is rather a sign that a recession is occurring. The recession itself will usually come from business malpractice or a jarring change in the economy.
A price ceiling is a government-imposed price control, or limit, on how high a something is charged for a product. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive.
Equation for total revenue is price multiply by the quantity
Fixed costs- cost that doesn't change no matter how much is produced (same thing)
Ex: Salary, morgage, insurance
Variable costs- a cost that rises and falls depending upon how much is produced (flacuating)
Ex: electricity bill raise during the summer for AC, cell phone bill (exceed text limit, call limit, etc.)
Marginal costs- cost of producing one more unit of a good.
Marginal revenue- additional income from selling another unit of a good
A price ceiling is a government-imposed price control, or limit, on how high a something is charged for a product. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive.
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The business cycle is represented by periods of growth and recession in the economy. It can be demonstrated in terms of long-term and short term growth. These periods of growth and recession are demonstrated using the country’s real gross domestic product (GDP) as its base.
Real GDP is the measurement of overall output of the economy in real terms, meaning it has been adjusted for inflation. When the country’s economy is in a problem spot, then the GDP shrinks. When the country is at the level of full employment, then the GDP grows.
The relationship between the business cycle and GDP growth is an element of modern capitalism. For an economy to be healthy, there will always be periods of growth and periods of recession. The severity of the growth and recession is a subject of real debate, especially in current politics.
The trend of the business cycle and unemployment are closely related. During times of economic recession unemployment will increase and the opposite will happen during times of recovery. However, the recession usually is not a cause of unemployment. Unemployment is rather a sign that a recession is occurring. The recession itself will usually come from business malpractice or a jarring change in the economy.
A price ceiling is a government-imposed price control, or limit, on how high a something is charged for a product. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive.
Equation for total revenue is price multiply by the quantity
Fixed costs- cost that doesn't change no matter how much is produced (same thing)
Ex: Salary, morgage, insurance
Variable costs- a cost that rises and falls depending upon how much is produced (flacuating)
Ex: electricity bill raise during the summer for AC, cell phone bill (exceed text limit, call limit, etc.)
Marginal costs- cost of producing one more unit of a good.
Marginal revenue- additional income from selling another unit of a good
A price ceiling is a government-imposed price control, or limit, on how high a something is charged for a product. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive.
Calculating the costs
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