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 Final
Cumulative exam on the material covered in Spring Semester
| Question | Answer |
|---|---|
| Traditional Economy | The use of scarce resources stems from ritual, habit, or custom. Economic decisions are made by ancestors or elders. |
| Market Economy | The use of scarce resources is dispersed throughout the society. Economic decisions are made by individuals. |
| Command Economy | The use of scarce resources is determined by a central authority. Economic decisions are made by the government. |
| Mixed Economy | The only kind of economic system that exists in the real world. All other systems are theoretical ideals. |
| Socialism | Basic productive resources are gov't owned, the rest are privately owned. Gov't plans and directs allocation of resources in key industries. |
| Capitalism | Productive resources are privately owned and operated. Resources for production are obtained by individuals' desire for profit but the gov't may promote competition and provide public goods. |
| Communism | All productive resources are gov't owned and operated, centralized planning directs resources, and gov't makes all economic decisions. |
| Name 3 examples of command elements in the US economy: | Monopoly Laws, Emissions Standards, Quality Assurance Laws, Licenses |
| In the circular flow matrix, businesses sell goods and services where? | The product market |
| What is money paid to businesses for goods and services called? | Revenue |
| What is money paid by businesses for resources called? | Costs |
| What is money paid to households for resources called? | Income |
| What is money paid by households for goods and services called? | Spending |
| What kind of income is paid for land? | Rent |
| What kind of income is paid for capital? | Interest |
| What kind of income is paid for labor? | Wages |
| What kind of income is paid for entrepreneurs? | Profits |
| What is government money given as incentives to businesses called? | Subsidies |
| What is government money given directly to households called? | Welfare |
| What is money given by businesses and households in exchange for public goods? | Taxes |
| Monopoly | Market structure with only one seller of a particular product. |
| Oligopoly | Market structure in which a few very large sellers dominate an industry. |
| Monopolistic Competition | Market structure that has all the conditions of perfect competition except identical products. |
| Perfect Competition | A market structure characterized by a large number of well informed independent buyers and sellers who exchange identical products. |
| Benefits of competition: | Higher quality goods and services, improved service, lower prices, increased innovation , more adaptive workforce |
| In the circular flow matrix, households sell the factors of production where? | The resource market |
| Advantages of a command economy: | Capable of quick, dramatic change; many basic public services available at little or no direct cost |
| Disadvantages of a command economy: | Does not meet the needs and wants of consumers; Lacks effective incentives to get people to work; Requires large bureaucracy, which consumes resources; Has little flexibility for day to day change; Inefficient allocation of resources |
| Advantages of traditional economies: | Sets forth clear economic roles for all members of the community; stable, predictable, and continuous life |
| Disadvantages of traditional economies: | Discourages new ideas; Stagnation and lack of progress; Lower standards of living |
| Advantages of market economies: | Individual freedom; capable of gradual adjustment to change; lack of gov't interference; high variety of goods and services; higher degree of consumer satisfaction; higher standards of living |
| Disadvantages of market economies: | rewards only productive resources (not the young, old, or sick); does not produce public goods; workers and businesses face uncertainty from competition or change |
| Good | Tangible economic product that is useful, relatively scarce, transferable to others; used to satisfy wants and needs |
| Scarcity | fundamental economic problem facing all societies that results from a combination of limited resources and people's virtually unlimited wants |
| Economic | social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources |
| Need | basic requirement for survival; includes food, clothing, and/or shelter |
| Want | something we would like to have but it is not necessary for survival |
| Factors of Production | productive resources that make up the four categories of land, capital, labor, and entrepreneurship |
| Land | natural resources or "gifts of nature" not created by human effort; one of four factors of production |
| Capital | tools, equipment, and factories used in the production of goods and services; one of four factors of production |
| Labor | people with all their abilities and efforts; one of the four factors of production, does not include the entrepreneur |
| Entrepreneur | risk-taking individual in search of profits; one of four factors of production |
| Gross Domestic Product | dollar value of all final goods, services, and structures produced within a country's national borders during a one-year period |
| Service | work or labor preformed for someone; economic product that includes haircuts, home repairs, forms of entertainment |
| Value | worth of a good or service as determined by the market |
| Paradox of Value | apparent contradiction between the high value of a nonessential item and the low value of an essential item |
| utility | ability or capacity of a good or service to be useful and give satisfaction to someone |
| wealth | sum of tangible economic goods that are scarce, useful, and transferable from one person to another; excludes services |
| Economic Growth | increase in a nation's total output of goods and services over time |
| Productivity | measure of the amount of output produced with a given amount of productive factors; normally refers to labor, but can apply to all factors or production |
| human capital | sum of peoples' skills, abilities, health, and motivation |
| Specialization | division of work into a number of separate tasks to be preformed by different workers |
| opportunity cost | the loss of the next best alternative use of money, time, or resources when one choice is made rather than another |
| economic model | simplified version of a complex concept or behavior expressed in the form of an equation, graph, or illustration |
| cost-benefit analysis | way of thinking that compares the cost of an action to its benefits |
| Standard of Living | quality of life based on ownership of necessities and luxuries that make life easier |
| Commodity | Kind of money where items of value are traded of other items of roughly the same value: |
| Representative | Kind of money where a paper note can be exchanged at a financial institution for pre-determined amount of valuable goods (i.e. gold, etc...) |
| Fiat | Kind of money based on trust in the stability and power of the government that mints currency: |
| 1900 | When did the first paper money get created in the United States? |
| Three basic questions of economics: | What is the produce? How to produce it? For whom to produce? |
| Inflation | a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency |
| Which statistic measures the total size of an economy? | GDP |
| Which measures (roughly) the average wealth of individuals in an economy? | GDP per capita |
| Which is better for comparing a countries economic growth from year to year? | Real GDP |
| What is generally considered to be a healthy level of inflation for a developed economy? | 3% |
| At 3% inflation prices double every... | 24 years |
| What are the 4 pillars of the American Free Enterprise system? | Economic Freedom, Voluntary Exchange, Private Property Rights, Profit Motive |
| Proportional Tax | imposes the same percentage tax rate on everyone, regardless of income |
| Progressive Tax | imposes a higher percentage rate of taxation on higher incomes than lower incomes |
| Regressive Tax | imposes a higher percentage tax rate on lower incomes than higher incomes |
| Example of Proportional Tax | Medicare |
| Example of Progressive Tax | Federal Income Tax |
| Example of Regressive Tax | Sales Tax |
| Structural | Type of Unemployment that involves changes in the structure of the labor market that make some skills obsolete. Most of these jobs will never come back. |
| Frictional | Type of unemployment where people are temporarily unemployed or between jobs |
| Cyclical | Type of unemployment that results from an economic downturn or recession. Drop in demand for goods & services result in drop in demand for labor and employers are forced to lay off workers. |
| Natural Rate of Unemployment | 3-6%, sum of structural & frictional unemployment (two kinds of unavoidable unemployment) |
| Highest Unemployment in US History | Great Depression 25.6% |
| Name 3 groups of people who aren't considered part of the labor force | retired, children, disabled, military personel, full time students, homemakers, prison inmates & mentally insane (the institutionalized) |
| What 2 categories of people with major financial needs are not calculated in the unemployment rate? | the underemployed and discouraged workers (those who have stopped looking for a job) |
Created by:
dosselaer
Popular Economics sets