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Stack #4690864
| Question | Answer |
|---|---|
| Define economics: | the study of how people deal with scarcity |
| what are the3 economic questions? | what to produce? how to produce? who to produce for? |
| Define scarcity: | unlimited wants an delimited resources |
| explain the factors of productions: | there is - LAND: resources from the earth used in production -LABOR: the skilled humans used in production -Capital: the supplies and such used in production |
| explain the two factors of capital: | Human-any human skills needed for production (ex. education, training) Physical- tangible products needed for production (ex. stethoscope, etc.) |
| Define entrepreneur: | someone who risks their own finances to build a business |
| Define oppurtunity cost: | value of your next best alternative |
| Define guns or butter: | gov tradeoff between spending on military vs. civilian needs |
| Define efficiency: | how well a business uses their resources to their full potential |
| what does a production possibilities curve show? | the alternative ways to use economic resources |
| define specialization | they produce what they do best |
| why does specialization cause nations to trade with each other | they trade their best products w the other best products |
| who benefits from international trade | the nations trading |
| define free trade | nation can trade w each other w no barriers or restrictions |
| what are the arguments for and against free trade | :)lower consumer costs, allows for specialization, better efficiency :( decreas tax revenuen |
| define tariff | tax on imported goods |
| define protectionism | the belief that you want to protect domestic producers against foreign competition w tariffs |
| good an dbad for proetctionsim ARGUEMENT: | ;) aids national defense, promotes infant industry, keeps money in country |
| trade surplus: | country has more exports than imports |
| trade deficit: | country has more imports than exports |
| what are trade agreements? | Treaty between countries to reduce trade barriers |
| what are the 4 economic systems? | command, market, traditional, and mixed |
| what is a command market system? | has central authority that makes most of the economic decisions |
| what is a free market economic system? | supply, demand, and price system helps ppl distribute resources and make the who, what, and how decisions |
| what is a tradiytional economic system? | allocation of scarce resources and other economic activity is result of ritual, habit, custom (everyone eknow shwta to do) |
| what is a mixed economic system? | combination of these three |
| explain how competition and self-interest work in the free market: | self interest makes ppl produce goods and service competition ensures quality and fairness |
| what is free enterprise? | business and consumers interact w limites gov supervision, run by supply and demand |
| what happens in circular flow model | money, resources, and goods flow thru the economy7 |
| define public goods | good available to everyone ex. national defense, clean air |
| how do consumer tell the gov and business what they want? | feedback, what they buy, and participation, etc. |
| what is the law of demand | when demand goes up, the price goes down, price goes up, demand goes down |
| what is a normal good: | income increases, more good is bought |
| inferior good? | when income goes up, less is bought |
| define compelemnst and give an example | products that are used tg, ice cream and cone |
| define substitutes | complementary products that can replace each other, ice cream and cookies |
| define elastic demand | amount u are willing an dbale to buy changes a lot, bottle of water |
| inelastic demand: | amount u are willing and able to pay changes a little, gas for car |
| what causes the demand curve to shift to the right? | demand increase |
| what causes the demand curve to shift to left? | demand decrease |
| define the law of supply | price increases, supply increases |
| main factor that affects elasticity of supply? | time |
| define subsidy | gov payment that encourages u to buy specific good |
| what are the factors that can cause supply curve to shift right | supply increase |
| define equalibrium | supply and demand are equal |
| disequilibrium: | demand and supply not = |
| define excess supply (surplus) | supply> demand price goes down |
| excess demand (shortage) | demand>supply price goes up |
| price floor | gov action to keep price above equilibrium, minimum wage |
| price ceiling | gov action to keep price below equilibrium , rent control |
| what is an industry? | a groupw similar products and businesses |
| what r the 4 market structures? | oligopoly, monopoly, monopolistic competition, and pure competition |
| oligopoly: | BTE, few sellers, identical or different product (a few dominant companies control the majority of a marke) |
| monopoly: | BTE, one seller close substitutes (a single company dominates an industry, ) |
| monopolistic competition: | no BTE, many sellers, different products |
| pure competition: | many seller, identical products, no BTE |
| what is collusion | agreement to set prices and production |
| what is a cartel? | an agreement by a formal organization of producers to coordinate prices and production |
| sole proprietorship: | business owned and managed by a single individual |
| partnership: | business organization owned by two or more epersons |
| corporation: | a legal entity or being owned by stakeholders |
| franchise: | temporary business investment that involves renting or leasing another firms successful business model |
| how does money have value? | durable, portable, scarce, acceptability, uniformity |
| what is monetary police? | actions taken by fed to manage the money supply, control inflation, etc. |
| who oversees monetary policy? | fed |
| what tools does fed have to influence monetary policy? | discount rate, open market operations, reserve requirements |
| what is the goal of the fed? | monitor money supply and keep stable inflation rates |
| why real GDP over nominal? | it uses inflation rate |
| business cycle: | fluctuations in production, trade, and general economic activity |
| expansion: | GDP increases, spending increases, unemployment decreases |
| define peak: | producing at full capacity, employment full |
| define contraction: | GDP declines |
| define recession: | GDP decreases not of rlong |
| define depression | long recession |
| through: | lowest point in business cycle |
| frictional unemployment: | pppl who take time to find job |
| cyclical unemployment: | w a business |
| structural unemployment: | bc of geographic |
| underemployment: | overqualified fo rjob |
| core inflation rate: | not food and energy |
| consumer price index: | average change over time in prices paid by consumers for goods/services |
| demand pullt theory for inflation? | demand bids up the price of limites goods and services |
| what is cost push theory of inflation? | supply shocks cause rise in price of production |
| who can collect taxes | state and national gov |
| progressive tax: | tax where % of income paid increases as income increases |
| proportional: | % of income paid in taxes remains the same for all income levels |
| regressive: | % of tax decreases as income increases PMO |
| fiscal policy? | use of gov spending and revenue collection |
| budget deficit? | revenue is less than expedentures |
| budget surplus? | revenue is greater than expedentures |
| how is national debt calculated? | add al deficits-all surpluses |
| who oversees fiscal spending | federal gov |
| what tools does f Polic makers include? | tax and spend |
| what are the goals of fiscal policy makers | aid country economy in growth and full employment |
| risk | possibility of closing money on investment |
| return | gains mad eon investment |
| liquidity | how quickly financial assets can be converted dto cash |
| stocks | share of ownership in publicly held company |
| bonds | IOU for a loan you've made eto institution |
| stock exchanges | where stocks are traded |
| stockholder | people who buy stocks |
| stock index | portfolio of stocks |
| bear vs bull market | bear:steady drop bull: steady rise |
| payroll dedcutcions | money withheld from gross pay |
| credit score | 3 digit # predicts how likely u are to pay borrowed money |
| ease | contract for tenant to live in area for certain amt of time protects tenants and landlords |
Created by:
Jocelyn_Theriault