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
Econ Ch 4
Ch 4 Econ
| Question | Answer |
|---|---|
| Four main steps of CFM | Households, markets for good/services, firms, markets for FOP |
| What flows from households to markets for goods/services? | Consumer expenditures |
| What flows from markets for goods/services to firms? | Firm revenues |
| What flows from firms to markets for factors of production? | Wages and rents paid |
| What flows from markets for FOP to households? | Income |
| What flows from households to markets for FOP? | Supply of factors of production |
| What flows from markers for FOP to firms? | FOP hired |
| What flows from firms to markets for goods/services? | Output of finished goods/services |
| What flows from markets for good/services to households? | Consumption of finished goods/services |
| How is most property acquired? | By purchase |
| Capitalism has purchases by..? | Voluntary exchange |
| When is voluntary exchange valid? | When an act is by choice and there is exchange of valuable consideration |
| Buyer's Reservation Price | Highest price voluntary paid for a good |
| Seller's Reservation Price | Lowest price voluntary accepted for a good |
| Bargaining Range | Difference between BRP and SRP (BRP-SRP=BR) |
| Positive Sum Outcomes | Total gains of winners is greater than total losses of losers (win win) |
| Negative Sum Outcomes | Total gains of winners is less than the total losses of losers (win lose) |
| Law of Demand | As price of good increases, people buy less of it // as price of good decreases, people buy more of it |
| Law of Supply | As price of good increases, business people make more of it // as price of good decreases, business people sell less of it |
| What type of interaction is the model of supply and demand? | Voluntary |
| Law of Increasing Cost | Marginal cost of production will increase as output expands |
| What is the equation of profit? | Total revenue-total cost |
| Equilibrium | Stable state of a system |
| Market Equilibrium | Stable price/quantity pair in which an indiv. market could not improve the outcome for himself by altering his behavior |
| Entrepenuer | Person who starts/finances/manages a company, searches for markets, and absorbs risk of venture |
| Bankruptcy | Legal procedure to strip owners of assets when they can't pay debts |
| Costs of bankruptcy | Owner loses investment in property, innocent workers are laid off |
| Benefits of bankruptcy | Assets moved out of hands of poor stewards, assets no longer deployed in activity that consumers don't want |
| Subsidy | Payment by gov to indiv/company to cover costs with no obligation to repay |
| Costs of Subsidy | Leaves assets on hands of incompetent owners, leaves asset deployed in areas that people don't value, transfers asset from taxpayers to others involuntary |
| Benefits of Subsidy | Prevents failure/bankruptcy, prevents lay offs |
| What system uses creative destruction? | Capitalism |
| Creative destruction | Process of constant industrial mutation where economy is always changing |
Created by:
MikalahQuillen
Popular Economics sets