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5086 50 Econ Terms
| Question | Answer |
|---|---|
| What are the two main branches of economics? | Micro & Macro |
| What three basic questions must every economy answer? | What How Whom |
| What condition forces people to compete for limited resources? | Scarcity |
| What is the next-best alternative given up when making a choice? | Opportunity cost |
| What type of thinking compares additional costs and benefits? | Marginal analysis |
| What are the four factors of production? | Land, Labor, Capital, Entrepreneurship |
| What payment is earned from land? | Rent |
| What payment is earned from labor? | Wages |
| What payment is earned from capital? | Interest |
| What payment is earned from entrepreneurship? | Profit |
| What motivates people to make economic decisions? | Incentives |
| What discourages certain economic behaviors? | Penalties |
| What curve shows trade-offs between two goods? | PPC |
| What does a point on the PPC represent? | Efficiency |
| What does a point inside the PPC represent? | Inefficiency |
| What does a point outside the PPC represent? | Unattainable |
| What term describes focusing on one task or skill? | Specialization |
| What concept explains why countries trade? | Interdependence |
| What system is based on tradition and customs? | Traditional economy |
| What system is controlled by government planners? | Command economy |
| What system is driven by supply and demand? | Market economy |
| What system combines government and market? | Mixed economy |
| What model shows how money and goods move through the economy? | Circular flow |
| What law states that price and quantity demanded move in opposite directions? | Law of demand |
| What law states that price and quantity supplied move in the same direction? | Law of supply |
| How does the demand curve slope? | Downward |
| How does the supply curve slope? | Upward |
| What is the point where supply equals demand? | Equilibrium |
| What happens when supply exceeds demand? | Surplus |
| What happens when demand exceeds supply? | Shortage |
| What is a movement along a demand curve called? | Quantity demanded |
| What is a movement along a supply curve called? | Quantity supplied |
| What causes demand to shift? | Non-price factors |
| What causes supply to shift? | Non-price factors |
| If income increases for a normal good, what happens to demand? | Increases |
| If the price of a substitute rises, what happens to demand? | Increases |
| If the price of a complement rises, what happens to demand? | Decreases |
| If production costs increase, what happens to supply? | Decreases |
| If technology improves production, what happens to supply? | Increases |
| What is the maximum legal price set by government? | Price ceiling |
| What is the minimum legal price set by government? | Price floor |
| What term describes how responsive demand is to price changes? | Elasticity |
| What type of demand changes greatly with price? | Elastic |
| What type of demand changes little with price? | Inelastic |
| What is the total value of goods and services produced? | GDP |
| What type of GDP is adjusted for inflation? | Real GDP |
| What is a general increase in prices called? | Inflation |
| What is a general decrease in prices called? | Deflation |
| What policy uses government spending and taxes? | Fiscal policy |
| What policy uses interest rates and money supply? | Monetary policy |
| Who controls monetary policy in the United States? | Federal Reserve |
| What happens to interest rates during expansionary policy? | Decrease |
| What happens to interest rates during contractionary policy? | Increase |
Created by:
rockcastle