Economics Midterm Study Guide Test Flashcards
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Shortage
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A situation in which the quantity demanded exceeds the quantity supplied at a given price.
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Supply
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The relationship between a good's price and the amount that producers are willing to supply
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Surplus
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A situation in which quantity supplied exceeds the quantity demanded at a given price
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Durable Good
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A good that has a life expectancy of at least 3 years.
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Labor
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Any work that contributes to the production of goods and services, one of the four factors of production.
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Tariffs
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A tax that a government applies only on imported goods.
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Depreciation
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The diminishing of the value of goods that is caused by wear and time.
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Value
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The worth that consumers attach to a good.
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Need
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A necessity; Something difficult to live without.
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Want
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The human desire to possess or use a certain good or service.
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Diminishing Marginal Utility
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The principle stating that as one's supply of a specific good or service increases, the satisfaction derived from each additional unity tends to decrease.
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Price Discrimination
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The practice of selling the same type of goods at different prices to different buyers.
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Price Taker
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A firm that has no real control over the price it's Receives for it's products.
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Monopoly
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A market in which there is only one supplier good, no other firms produce a close substitute for that good and entry into that market is blocked; one of the four main types of market models.
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Oligopoly
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A market in which there are only a few firms, products are either differentiated or virtually the same, and potential competitors are discouraged from entering the market by significant entry barriers; one of the four main types of market models.
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Private Sector
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That part of an economy controlled by private individuals and businesses.
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Public Sector
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That part of an economy controlled by National, state, and local governments.
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Capitalism
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Economic system in which the majority of a nation's capital is owned and controlled by private individuals and businesses.
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Entrepreneur
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A person who undertakes the management and financial risk of an economic enterprise.
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Laws of Economics
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General rules or principles guiding the production, distribution, and consumption of goods.
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Trade of balance
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The difference in value of the goods that a country sells abroad compared to those it purchases from other countries; a favorable balance exists when a country exports more than it imports.
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Market
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A mechanism that allows people to exchange goods.
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Demand
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The relationship between a good's prices and the quantity that people are willing to buy.
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Free Trade
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The exchange of goods free from governmental restrictions or penalties.
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Geographic Specialization
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The production of goods in which a country or region has absolute or comparative advantage.
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Efficiency
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The quality of producing effectively with minimum of waste.
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Capitalist
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An individual who owns a capital goods or owns a share of some business that produces goods.
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Mass production
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System which turns out large quantities of identical products.
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Total Cost
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The sum cost of all the factors of production used in making goods.
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Imperialism
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The establishment of colonies and extensive territories created to benefit their mother countries.
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Division of Labor
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The separation of work into individualized tasks.
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Microeconomics
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The study of specific components within a major economy and how the choices made by individuals, households, and businesses affect that economy.
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Physiocrats
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A French group of economic critics known as some of the earliest advocates of laissez-afire economics.
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Scarcity
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Limited availability of goods at a particular time and place.
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Service
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Intangible goods produced by labor and for which people expect to pay.
