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Economics review
final
| Term | Definition |
|---|---|
| Entrepreneur | a risk taker in search of profits, opens a business |
| Scarcity | basic economic problem, wants greater than resources |
| Utility | capacity for an economic product to be useful |
| Market Economy | USA, supply and demand determines production |
| Command Economy | communism, government determines production |
| Traditional Economy | lack of industry, slow to accept change |
| Inflation | general increase in price levels |
| Sole proprietorship | one owner, do not have to share profits |
| Partnership | least common, must fill out an agreement over how to split the profits |
| Corporation | Many owners/stockholders, best growth potential |
| Law of Demand | amount consumers are willing to purchase varies inversely or opposite of the price |
| Law of Supply | amount producers offer for sale varies directly with the price |
| Elastic | wants, small price change produces a large change in supply and demand |
| Inelastic | needs, large price change produces only a small change in supply and demand |
| Fixed Cost | overhead, cost that remains the same each month like rent |
| Variable Cost | cost that changes from month to month like the cost of raw materials |
| Total Revenue | number of units sold multiplied by the price per unit |
| Rationing | a system of allocating resources without using prices |
| Price Floor | minimum price that can be charged for a product, causes surplus |
| Price Ceiling | maximum price that can be charged for a product, causes shortage |
| Surplus | situation where supply is greater than demand |
| Shortage | situation where demand is greater than supply |
| Pure Competition | farmers who compete with identical products |
| Monopolistic Competition | firms use advertising to achieve product differentiation (walmart vs. target) |
| Monopoly | one seller of the product, has no substitutes, patents/copyrights |
| Boycott | refusal to buy products from targeted companies |
| Strike | refusal to work until demands are met |
| Income Tax | largest tax revenue for the federal government |
| Sales Tax | largest tax revenue for the state governments |
| Public Sector | federal, state, and local governments |
| Private Sector | individuals and businesses |
| Fiat Money | money by government decree, system of USA - money worth something only because the government says it is worth something |
| Commodity Money | money that has an alternative use like corn or tobacco for money |
| Greenbacks | nickname given to US currency that began during the US Civil War |
| Federal Reserve | USA's central bank system since 1913 |
| FDIC | system of insurance for bank deposits in USA since 1934 |
| Stocks/Equities | represents shares of ownership in companies |
| Dow Jones Industrial Average | measurement of 30 stocks since 1890 (AT&T, Ford, Wells Fargo, etc.) |
Created by:
schmisam000
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