Consumer Economics Terms – Flashcards
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Capital Goods
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tool equipment, or other manufactured good used to produce other goods and services.
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Consumer Goods
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good intended for final use by consumers rather than businesses.
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Scarcity
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limited quantities of resources to meet unlimited wants
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Services
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work or labor performed for someone; economic product that includes haircuts, home repairs, ect.
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Value
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worth of a good or service as determined by the market.
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Private Property Rights
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the freedom to own and use our own property as we choose as long as we do not interfere with the rights of others
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Capitalism
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an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.
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Command Economy
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A central authority makes the major decision about what, how, and for whom to produce
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Profit Motive
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the force that encourages people and organizations to improve their material well-being
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Sole Proprietorship
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business owned by one person
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Unlimited Liability
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The owner is personally and fully responsible for all losses and debts of the business
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Inventory
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the amount of goods on hand
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Partnership
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a business owned by two or more people
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Corporation
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a business owned by stockholders who share in its profits but are not personally responsible for its debts
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Stock
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a shareholder's ownership in a corporation
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Stockholder
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An owner of one or more shares of a corporation
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Dividend
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share of the profits from the business
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Principal
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The money originally invested or loaned, on which basis interest and returns are calculated
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Interest
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a fixed charge for borrowing money
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Merger
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Combination of two or more companies into a single firm
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Net Income
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the amount a person has left after income tax is deducted
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Depreciation
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decrease in value of an asset due to becoming old/outdated or use
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Cash Flow
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Movement of the money you receive and the money you spend.
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Conglomerate
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a group of diverse companies under common ownership and run as a single organization
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Credit Union
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a nonprofit financial institution that is owned by its members and organized for their benefit
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Nonprofit organization
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An organization whose goals do not include making a personal profit for its owners or organizers
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Demand Curve
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graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time.
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Law of Demand
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consumers buy more of a good when its price decreases and less when its price increases
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Demand
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combination of desire, ability, and willingness to buy a product.
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Elasticity
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a measure of responsiveness that tells us how a dependent variable such as quantity responds to a change in an independent variable such as price
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Supply
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an amount of something available for use
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Law of Supply
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the principle that suppliers will normally offer more for sale at higher prices and less at lower prices
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Supply Curve
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a graph of the relationship between the price of a good and the quantity supplied
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Subsidy
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government payment to encourage or protect a certain economic activity
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Stages of Production
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increasing returns, diminishing returns, and negative returns
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Diminishing Returns
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the stage where output increases at a diminishing rate as more units of a variable input are added
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Overhead
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the general expenses of running a business, such as rent, taxes, electricity, and heating
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Fixed Costs
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Costs that do not vary with production or sales level
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Price
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a signal, giving information to buyers and sellers
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Rationing
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a limited portion or allowance of food or goods
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Rebate
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a refund of some fraction of the amount paid
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Surplus
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any unsold product on store shelves or in warehouses
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Shortage
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when supplies do not meet demands
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Price Ceiling
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a legal maximum price that may be charged for a particular good or service
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Minimum Wage
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the lowest legal wage that can be paid to most workers
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Price Floor
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a minimum price for a good or service
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Target Price
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a price floor for farm products
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Price-Fixing
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an agreement between two or more firms on the price they will charge for a product
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Monopoly
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a market in which there are many buyers but only one seller
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oligopoly
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a market in which control over the supply of a commodity is in the hands of a small number of producers and each one can influence prices and affect competitors
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Laissez-faire
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the doctrine that government should not interfere in commercial affairs
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Strike
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stop work in order to press demands
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Picket
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a protester posted by a labor organization outside a place of work
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Boycott
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a group's refusal to have commercial dealings with some organization in protest against its policies
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Lockout
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When management closes the doors to the place of work and keeps the workers from entering until an agreement is reached
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Great Depression
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the economic crisis beginning with the stock market crash in 1929 and continuing through the 1930s
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Unskilled Labor
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labor that requires no specialized skills,education, or training
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Skilled Labor
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labor that requires specialized skills and training
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Semiskilled Labor
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workers with enough mechanical abilities and skills to operate machines that require a minimum amount of training
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Seniority
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higher rank than that of others especially by reason of longer service
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Arbitration
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settling a dispute by agreeing to accept the decision of an impartial outsider
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Mediation
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negotiation to resolve differences conducted by some impartial party
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Sin Tax
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a relatively high tax designed to raise revenue and reduce consumption of a socially undesirable product such as liquor or tobacco
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Sales Tax
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a tax based on the cost of the item purchased and collected directly from the buyer
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Tax Loophole
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an exception or oversight in the tax law that allows some people and businesses to avoid paying taxes
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Medicare
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a federal program of health insurance for persons 65 years of age and older
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Medicaid
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Federal program that provides medical benefits for low-income persons.
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Tax Return
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form used to file income taxes
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FICA
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a tax on employees and employers that is used to fund the Social Security system (Federal Insurance Contributions Act)
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Pork
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a legislative appropriation designed to ingratiate legislators with their constituents
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Fiscal Year
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any accounting period of 12 months
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Budget Surplus
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an excess of tax revenue over government spending(left over money)
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Budget Deficit
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when the government spends more money than it collects in taxes
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Financial Asset
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Claim on the property or income of a borrower
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Pension
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a regular payment to a person that is intended to allow them to subsist without working
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CD
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a debt instrument issued by a bank (Certificate of Deposit)
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Beneficiary
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person entitled to benefits or proceeds of an insurance policy or will
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Maturity
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period of time that must pass for a time deposit to pay the stated rate of interest
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401(k) Plan
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a tax-deferred investment and savings plan that acts as a personal pension fund for employees
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Bull Market
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a period of increased stock trading and rising stock prices
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Bear Market
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A steady drop in the stock market over a period of time
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GDP
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total dollar value of all final goods and services produced in a country during a single year (Gross Domestic Product)
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Baby Bloom
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increase births between 1945 to 1964
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Depression
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a long-term economic state characterized by unemployment and low prices and low levels of trade and investment
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Recession
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A temporary decline in the economy
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Inflation
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a general and progressive increase in prices
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Labor Force
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the total number of workers, including both the employed and the unemployed
