Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Economics Test 1
| Term | Definition |
|---|---|
| scarcity | condition where unlimited human wants face limited resources |
| shortage | occurs when producers will not or cannot offer goods or services at current prices |
| needs | required for survival |
| wants | desired for satisfaction but not essentaial to survival |
| ecomonics | defined as the study of how people seek to satisfy needs and wants with scarce resources and the choices they make |
| production | the process of creating goods and services |
| opportunity cost | the cost of the next best alternative among a person's choice (could be money, time, or resources a person sacrifices to make their final choice) |
| trade-offs | all the alternatives we give up when we choose one course of action over another |
| market | an arrangement that allows buyers and sellers to exchange things |
| specialization | concentration of the production efforts of individuals and corporations on a limited number of activities |
| Adam Smith | wealth of nations, believed a nation's wealth is the goods and serives that it creates, laissez-faire economics |
| laissez-faire economics | economics funtions most efficiently when unencumbered by government regulation |
| self-interest | motivating force in the marketplace, pushes consumers to purchase goods and services |
| competition | regulating force in the economy, causes more production and brings additional producers into the market |
| "invisible hand" | self interest and competition work together to regulate the marketplace |
| traditional economy | relies on habits, customs, and traditions to answer the economic questions of production and consumption (Ex. Amish and Inuit communities) |
| market economy | individuals and businesses answer the 3 economics questions and own the factors of production, government's role is minimal (Ex. singapore, new zealand, ireland) |
| Karl Marx | Communism founder (marxism) |
| centrally planned/command economy | socialism/communism, government controls the factors of production, government controls where citizens work, the wages they are paid, and the price of goods and services |
| socialism | political and economic theory which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole (heavy taxation, large welfare state) |
| communism | political system that arose out of the philosophy of socialism, authoritarian government, government controls everything (Ex. North Korea, Zimbabwe) |
| mixed economy | blend of market system with government intervention, private sectors and government work together (Ex. U.S., Germany, Japan, Canada) |
| imminent domain | the right of a government to take private property for public use |
| keynesian economics | governemnt investment and intervention is needed to smooth out economic cycles, a decline in consumer spending can be balanced by an increase in government spending |
| business cycle | refers to economic wide fluctuations in production, trade, and general economic activity, natural and unavoidable, government attempts to smooth out rough spots |
| consumer confidence | a measure of perception, not actual economic activity |
| inflation | across the board rises in prices of goods and services over a period of time (current state: 7.1%) |
| recession | a significant decline in economic activity lasting more than a few months (visible in GDP, personal income, employment, industrial production, and retail sales) |
| Gross Domestic Product (GDP) | defined as the total value of all goods and services produced in an economy (personal consumption + government expenditures + business investments + exports - imports = GDP) |
| durable goods | useful life of 3 years or more (car, furniture, appliances) |
| non-durable goods | things we need all the time (food, gas, clothing, etc.) |
| What are the three basic economic questions every society must answer? | what to produce, how to produce, for whome to produce |
| What are the factors of production? | entrepreneur, land, capital, labor |
| Why do market exist? | no one is self sufficient and they allow us to exchange the things we have for things we need/want |
| What events are credited with moving the U.S. from Adam Smiths’ laissez-faire economics to Keynesian economics? | the great depression and the new deal programs |
| List the two ways in which our government seeks to regulate the U.S. economy. | economic (public utilities, minimum wage, etc.) and social (FDA, OSHA, etc.) regulation |
| List the four ways in which our government attempts to stabilize the U.S. economy. | employment, adjusting tax rates and spending, monetary policy, and economic citizenship |
Created by:
ava6516