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Economic Terms
Mrs. McTigue's terms for civics and economics 2017
| Term | Definition |
|---|---|
| Laissez-faire | "Hands off"- let the market decide instead of the government |
| Need | Basic requirement for survival |
| Mixed Economy | Combo Economy where the market makes the decisions but the government passes down rules and regulations |
| Factors of Productions | Combo of land, labor, capital and entrepreneurship needed to produce products |
| Command Economy | Government owns all resources and decides what to produce and who to produce it for |
| Market Economy | The Market owns resources and answers the three basic economic questions based on competition, profit incentives and self interest |
| Opportunity cost | the next best alternative given up for an economic choice |
| Economics | The study of how a society is satisfies it's unlimited wants and needs with it's limited resources |
| Traditional Economy | The resources are based on custom and tradition. tends to be more family/tribe centered. |
| Want | way of Expressing an unnecessary need |
| Value | What something is worth |
| Paradox of value | Non-necessities are expensive while basic needs are inexpensive |
| Scarcity | When there are not enough resources to satisfy a market's wants and needs |
| Cost-Benefit analysis | Comparing marginal costs and benefits of an action |
| Variable costs | Expenses that change based on the product produced |
| Fixed Costs | Expenses that never change |
| Marginal Costs | The extra cost to produce one more of the product |
| Substitute | A good purchased that's closely related to another product |
| Equilibrium | a situation in which quantity demanded equals quantity supplied. |
| complimentary good | goods that are typically purchased together. |
| Price Ceiling | the highest legal price that can be charged for a good |
| increase | the law of demand states that as demand increases prices will ___. |
| decrease | the law of supply states that as supply increases, prices will ___. |
| price floor | the lowest legal price that can be charged for a good |
| shortage | when quantity demanded is greater than quantity supplied |
| surplus | when quantity supplied is greater than quantity demanded |
| partnership | a business jointly owned by two or more persons |
| corporation | a business organization recognized by law as separate entity having the rights of an individual |
| sole proprietorship | a business owned and run by one person |
| conglomerates | a business that has at least four businesses all making different products |
| multinationnal | a corporation that has manufacturing or service operations in a number of different countries |
| horizontal merger | two or more businesses that produce the same kind of product |
| vertical merger | when businesses join together that are involved in different steps of the manufacturing process |
| perfect competition | characteristics are: many sellers, easy to get in and out of the market, products are nearly identical, and price is set by supply and demand |
| monopolistic competition | characteristics are: market sets the price, competitors compete with non-price competition tactics like customer service, quality |
| oligopoly | characteristics: very few sellers, difficult to enter the market, causes high prices |
| technical monopoly | occurs when businesses own a patent or copyright |
| geographic monopoly | occurs when it is the only business selling a good or service in town |
| monopoly | only one seller in a particular category, no close substitutes, almost impossible to enter the market |
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LindsPalmTree
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