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K. Lerchie FE Voc.

Free Enterprise

Economics The study of how individuals, families, businesses, and societies use resources to fulfill thier wants and needs.
Unemployment Must be looking for a job
Structural Unemployment Caused by changes in the economy, such as technological advances or discoveries of natural resources
Cyclical Unemployment Unemployment associated with up or down fluctuations in the business cycle.
Seasonal Unemployment Unemployment caused by changes in the season or weather
Producer Creates goods/provides services
Consumer Buy/Uses Goods and Services
Entrepreneur someone willing to take risks in business and fail
Resource Something required for production
Opportunity cost value of the next best alternative given up for the alternative that was chosen
Distribution moving goods from where they are produced to people that will buy them
Economic System A way of using services to satisfy peoples wants and needs
Wealth of Nations An Inquiry into the nature and causes of the Wealth of Nations
Costs of Production Cost to produce a good/service
Command Economy government leaders make all decisions, people make no choices
Market Economy People make all decisions and are in control (Capatilsim) Opposite of Command
Developing Economy economy of 3rd World Countries, or those economies that are trying to develop
Socialism Goverment owns all means of production, Gov controls Resoruces
Communism No entrepreneurship, large gap in rich and poor, everyone owns everything, work to your full ability, receive according to your needs
Communist Manifesto By Karl Marx, Founding principles of Communism
Underground Market Transactions made by people who do not respect state and federal laws, and do not report earnings
Capitalism Where individuals own factors of produciton
Capital goods Used to make a product or provide a service
Conssumer goods goods are services made to be used
Profit Motive Motive to produce a good/service ($$)
When does a bicycle become a consumer good when it is used to produce a good
What is the role of competition in the free enterprise system to regulate price and quality
Generic Products Are not name brand, are not advertised, are usually cheaper
Demand The amount of goods and servieces that a consumer is willing and able to buy
Supply Willingness and ability of producers to provide goods and services at various prices
Profit Money left after costs of production have been met
Law of Demand As price goes up, qunatity demanded goes down, If price goes down, quantity goes up
Law of Supply as the price rises for a good, the quantity supplied goes up, as the price falls, the quantity produced decreases
How does supply and demand determin the best price for an item they create an equilibrium price, (changes per purchase)
Fixed costs Price for products is always the same
Variable Costs Constant change in relation to a business
Total Costs all the costs, made of fixed and variable costs
Average Costs equal to total costs divided by the number of goods produced
Marginal costs change in total cost when one more additional unit is produced
Monopoly One Company controls production and sales completely of a product
Advertising Used to sell the product, associates it with superiority, happiness, or acceptance
Natural Monopoly A monopoly formed because of natural causes ex. a general store in a tiny town in the middle of nowhere would have a monopoly of all goods in that town.
Pure Monopoly Meets the requirments of a single seller, no entry
Government Monopoly Monopoly created by the government
Technological Monopoly If you invent something, you own the rights, and therefor can have a monopoly of it
Collusion Companies work together to decide prices of products and determine plans for the future
Laissez-faire Where the government does not interfere with the economy
Federal Trade Commision Protects from monopolies, price fixing, false advertising, and other illegal business practices
Monopolistic Competition large number of sellers offer similar but slightly different products
Boycott where consumers refuse to support a good for various reasons
Lockout when the management or owners of a business prevent workers form working until they agree to conditions or contracts
Strike mass refusal by employees to perform work for a corporation or public institution
Open Shop A business/factory where no union members are allowed
Closed Shop A business/factory where only union members are allowed
Right-To-Work State laws forbidding unions from forcing workers to join, and/or pay union dues
Binding Arbitration If the union and company hire an aribtrator, they follow the orders of the arbitrator
Salary Yearly Pay
Wage Hourly or Monthly Pay
Profit Sharing Incentive plans introduced by businesses that provide direct or indirect payments to employees that depend on the companies profitability and the employees regular salary and bonuses
Purpose of Unions To protect the rights of Workers
Apprenticeship System of training a new generation of skilled crafters
Social Security Social welfare service concerned with social protection
Medicare A social insurance program administered by the US providing health care to people 65 and older or meet a criteria
Income Tax Tax on ALL income
Income tax day Federal - April 15 State - May 15
Office Management and Budget Executive agency that advises the president on the federal budget, keeps track of income and expenses for the nation
Federal Budget Budget for the federal government, is forcasted on Oct 1st - Sept 30th
"buying on the margin" Risky technique involving the purchase of securities with borrowed money and with the shares as collateral
PAC Political Act Commitee, try to influence senators and congressmen
Progressive Tax Where people with higher income pay a higher percent of income tax than those with a lower income
Regressive Tax Where people with higher income pay a lower percent of income tax than those with a higher income
PIN Personal Identification Number, password at ATMs
ATM Automated Teller Machine, allows customers to perform basic banking activities
Alexander Hamilton Started the National Bank, Is on the 10$ bill, was the first Treasurer
Federal Reserve the central banking system of the US composed of the Board of Governers, the Federal Open Market Commitee, and Regional Federal Reserve Banks
FDIC Federal Depossit and Insurance corporation, insures deposits up to 100,000$
Collateral Property accepted as security for a loan or other obligation
Mortgage a temporary pledge of property to a creditor as security for the repayment of debt
Interest A charge on a loan
Installments The periodic payments you pay on a loan
Principal Amount borrowed
Bankruptcy When a debtor is unable to meet his debts or discharge his liabilities
4 C's of credit rating Collateral, Capacity to Pay, Character, Credit
How would the closing of the only factory in town change credit supply? (blank)
If people save more, how will that change government spending? (blank)
How are sales of consumer goods, affected by people putting money into savings accounts? (blank)
Interest rates percent sum of money charged for its use
Inflation the persistent decline in the purchasing power of money caused by the increase in the available money beyond proportion of available goods and services
GDP Gross Domestic Product - all production of a nation
GNP Gross National Product - All production of home based companies
Stock Market Where you can buy/sell stock in a company, along with bonds
Port of Shreveport brings in raw materials
Red River Wants to be family orientated, its not
Louisiana Boardwalk Outlet mall, brings in people
What role does Louisiana play in the US economy? (blank)
How will your career choice affect the US economy? (blank)
How does the supply of oil affect production in the US? (blank)
Applying for a job dress appropriately, know how much you want to make, have a list of jobs before, resume
Warranties a gaurantee from the company that the product is free of defect and will be replaced under certain circumstances
Employee Rights Right to join a labour union, right to collective bargaining, fair working hours, and pay, safety and compensation, no discrimination
Contract Obligations obligated to follow what is sated in the contract
Tax Reform the process of changing the way taxes are collected or managed by the government
Checking Accounts a bank account in which checks may be written appropriate to amounts in deposit
Know how to fill out a check (blank)
Know how to fill out a ledger (blank)
Credit Cards A card issued by a bank/business authorizing to buy goods/services
Passport an official document that certifies ones identity and citizen ship, and allows you to travel abroad
Foreign Currency money from a foreign country
Personal Budget a finance plan that allocates future personal income toward expenses, savings, and debt repayment
Market Structure Describes the state of a market with respect to comptition
Market Exchanges when you buy/sell stock in a market
Market Economist believes market should decide everything
Democratic Socialism Advocates socialism as a basis for the economy and democracy as a governing principle
Proletariat The working class
Elastic Effect the rise and fall in a products price greatly affects demand
Subsitution Effect if two items satisfy the same need and the price of one rises, people will buy the one that is less expensive
Competetive Advertising When people advertise competetively
Clayton Antitrust Act prevents anticompetetive practices in companies, monopolies, and unfair business practicess
Oligopoly Where a market is dominated by a small number of sellers, or oligopolists
Injunction an equitable remedy in the form of a court order where a party is required to do, or prevented from doing certain acts
Commercial Bank bank that deals with loans and deposits for large corporations or businesses
Credit Union a union where the members are the owner, and typically gives higher interest on savings, and lower interests on loans
How does scarcity of raw materials affect production? (blank)
How does the economy of one country affect another? (blank)
Should there be a different minimum wage for teens and adults? (blank)
Created by: Haty