BUSN101 Chapter 2 Final Prep – Flashcards
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Economics is the study of how a society employs resources to produce goods and services and distribute them among competing groups and individuals.
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A simple supply curve shows that an increase in the price of a good will cause the quantity supplied to increase.
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There are some restrictions on freedom of assembly and freedom of speech under a mixed economy system.
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The consumer price index is a statistic used to compute the pace of inflation or deflation.
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When the market price of a good is above its equilibrium value, and all other determinants are unchanged, a surplus will exist in the market.
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One way to lessen the US government budget deficit is to cut spending.
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When the supply curve and demand curve for a particular good are shown together on a single graph, the point at which the two curves intersect identifies the equilibrium price of the good.
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One of the most significant problems faced by communist nations is persistent shortages of basic goods, such as food and clothing.
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A major benefit of socialism is the emphasis on social equality.
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Cyclical unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.
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In recent years, the US manufacturing sector has experienced rising productivity.
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A typical demand curve shows that people tend to buy more of a good when its price decreases.
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Monopolistic competition exists when a large number of firms produce goods that are similar but are perceived by buyers as being different.
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Adam Smith is considered by some to be the father of modern economics.
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Under capitalism, most means of production and distribution are privately owned and operated for profit.
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Thomas Malthus was pessimistic about the ability of a society to achieve high standards of living for most of its citizens because he believed that significant population growth would result in shortages of food and resources.
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Economics was known as the "Dismal Science" because too many people would result in food shortages and shortages of other resources.
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The four basic types of unemployment are frictional, structural, seasonal, and cyclical.
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Microeconomics looks at the behavior of individual people and organizations in specific markets.
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The foundation of the US economic system is based on capitalism.
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A command economic system is characterized by reliance on the government to determine what is produced and who gets the output.
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If a shortage exists for a good in a free-market economy, the price of the good will rise.
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An oligopoly is a market that is characterized by a few large sellers who dominate the market.
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The US economic system relies on key economic indicators, such as GDP, to measure economic progress.
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When the government runs a continual budget deficit, it increases the national debt.
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A major premise of a socialist system is to reduce the inequality in the distribution of wealth.
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Disinflation is a condition in which the price increases are slowing.
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Brain drain has occurred in many socialistic nations because tax rates on well-respected professionals, such as doctors, tend to be very high.
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Three important economic indicators of the US are the unemployment rate, the price indices, and the gross domestic profit (GDP).
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Under the socialist system, the number of choices in the market is directly related to government involvement in markets.
