Civics – Economics Vocabulary – Flashcards

Unlock all answers in this set

Unlock answers
question
The study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants
answer
Economics
question
- Inability to satisfy all wants at the same time - Resources and goods are limited - Requires that choices be made - Unlimited wants + limited resources --> Scarcity
answer
Scarcity
question
- Scarcity --> choices --> opportunity cost - The cost of the next best use of your time or money to do one thing rather than another.
answer
Opportunity cost
question
1. What to produce 2. How to produce 3. Who will get them Communism - Gvmt decides all.
answer
3 Basic Economic Questions
question
1. Natural resources - (Land, water, minerals, animals, forests) 2. Labor (human) - (workforce... both physical and mental) 3. Capital - produced goods that can be used as resources for further production. (machinery, tools, computers) 4. Entrepreneurship - starting a new business, introducing a new product, improving on a product or service, improving management techniques.
answer
4 factors of production
question
A market is any place where there is an exchange of resources for goods and services for resources.
answer
Market
question
How much (quantity) of a product or service is desired by customers (us). Demand can only exist under all 3 conditions: 1. Have resources 2. Willing to give up resources 3. Want a good or service
answer
Demand
question
An economic rule stating that the quanta demanded and price are inversely proportional.
answer
The Law of Demand
question
Total demand of all consumers for a product or service. the following factors will cause a change in market demand 1. # of customers 2. Consumer tastes 3. Consumer expectations 4. Substitute/competing products 5. Complementing products
answer
Market Demand
question
Represents how much the market can offer. The quanta supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price.
answer
Supply
question
1. Price and quantity supplied are directly proportional. 2. Suppliers will typically offer more forsake at higher prices and less at lower prices. 3. Profit motivates producers.
answer
The Law of Supply
question
The interaction of supply and demand High Demand + Low Supply = Price SHARP INCREASE High Demand + High Supply = Price INCREASE Low Demand + Low Supply = Price DECREASE Low Demand + High Supply = Price SHARP DECREASE
answer
Price
question
- Found in rural, non-developed countries - Customs and traditions answer the basic economic questions - Technology is not used - Farming, hunting, and gathering are done the same way as the previous generations - Economic activities are centered around the family - Men and women are given different economic roles and tasks
answer
Traditional Economy
question
- The government or other central authority answers the 3 basic economic questions. - Change can occur easily - Little individual economic freedom - No competition - Businesses are not run to create profit - Few choices - Factories are concerned with quotas - Shortages are common - Government dictates your job - Government sets the prices of goods and services
answer
Command Economy
question
- Resources are owned and controlled by individuals - Individuals answer the basic economic questions - Individuals compete to earn profit - Individual freedom is key - Decisions are made by the basic principles of supply and demand - Motivated by profit - Lots of competition among businesses - No government intervention
answer
Free Market Economy
question
- Government and individuals share the decision making process - Government guides and regulates production of goods and services (Laissez-Faire)
answer
Mixed Economy
question
- Markets - Economic freedom - Private property rights - Competition - Profit Motive - Consumer Sovereignty - Individual initiative
answer
7 features of the American Economy
question
Place where goods and services are exchanged
answer
Markets
question
Right to choose what we buy and what we do with our money
answer
Economic Freedom
question
Freedom to own and use our property as long as we don't interfere with others.
answer
Private Property Rights
question
The struggle between buyers and sellers to get higher quality, lower prices.
answer
Competition
question
What is left after all the costs of production have been paid... is what motivated producers
answer
Profit Motive
question
The consumer is king... through their purchases they decide what goods and services will be produced
answer
Consumer Sovereignty
question
Encourages people to take risks... entrepreneurship
answer
Individual Initiative
question
Famous Economist... wrote the Wealth of Nations. (I don't have the rest of the definition)
answer
Adam Smith
question
- Owned by individual - Controlled and managed by the owner or person employed by owner Positives: - Pride of owning business - Receive all profit - Make all decisions Negatives: - Personally liable for losses (unlimited liability) - Difficult to raise financial capital - Not easy to find qualified employees
answer
Sole Proprietorship
question
- Owned by 2 or more people - Articles of partnership... legal document that spells out specific responsibilities of each owner Positives: - Easy to gather funds - Multiple talents - Division or responsibilities Negatives: - Complex legal structure (articles of partnership) - Owners have unlimited liability
answer
Partnerships
question
- Need a charter... government document granting permission to organize - Charter specifies amount of stock that will be issued - Stockholders become owners - Use $ from stock sales to setup and run business Positives: - Easy to obtain $ - Board of directors can hire professional Managers to help run business - Ownership is easily transferred - Limited liability... corporation not owners is responsible for debts and losses Negatives: - Expensive and complex to set up - Business owners have little say in management - Subject to more government regulations - Double taxation... corporation pays taxes on profits - Stockholders pay taxes on those earnings
answer
Corporation
question
Goods that when consumed by one individual cannot be consumed by another. Examples: clothes, shoes, food, electronics, insurance, haircuts, medical services, auto maintenance Exclusion principle - a person must pay for the product in order to use it
answer
Private goods/services
question
Goods that are consumed collectively Examples: public parks, libraries, museums, highways, national defense, street lighting, police, fire department, education Non-exclusion principle - no one is excluded from consuming the benefits of a public good or service Public goods and services are crucial to the economy because they create jobs and they provide products and services to all people regardless of socio-economic status.
answer
Public goods/services
question
Unintended side effects of an action that affects someone not involved in the action can be both positive and negative.
answer
Externality
question
Market situation when an individual or business has control over a particular product or service. Examples: Standard oil, Ford (early 1900's)
answer
Monopoly
question
Market situation in which the costs of production are minimized by having a single firm produce the product. Examples: Dominion Power, water
answer
Natural Monopoly
question
Laws to promote and preserve competition, controls monopolies. Example: Sherman Antitrust Act - used to break up standard oil, AT&T
answer
Anti-trust laws
question
Company pulls a product off the shelf or agrees to make changes for better safety Examples: Meat (E.Coli), Toyota (brakes), GM (brakes)
answer
Recall
question
Environmental Protection Agency Goals and Priorities: - Climate change - Improving air quality - Safety of chemicals - Protecting America's waters - Working for environmental justice
answer
EPA
question
Food and Drugs Administration Mission: - Helping to speed innovations that make medicines and foods safer and more effective - Providing the public with accurate, science based information - Insuring security of the supply of foods and medicine products
answer
FDA
question
Federal Trade Commission FTC testifies on protecting social security numbers, millions of consumers are victims of identity theft each year. Goals: - Consumer protection and competition jurisdiction in broad sectors of the economy - law enforcement - creates practical and plain-language educational programs for consumers
answer
FTC
question
Federal Communications Commission - Regulates public airwaves - Nationwide and worldwide wire and radio communication Public safety - 911, Amber Alert
answer
FCC
question
Written in 1906... exposed the terrible working conditions in the meat-packing industry... leading to new federal food safety laws.
answer
The Jungle (by Upton Sinclair)
question
An experiment lead by Dr. Wiley (father of the FDA)... volunteers ingested various chemical preservatives)... human "guinea pigs"
answer
Poison Squad
question
The utilization of economic goods in the satisfaction of wants. Consumer preferences and price determine what is purchased and consumed.
answer
Consumption
question
A thing that motivates or encourages one to do something Ex: Sales, rebates, discounts
answer
Incentive
question
To bring goods or services from abroad for sale
answer
Import
question
The sending of goods or services to another country for sale
answer
Export
question
- Solve the problem of scarcity - Obtain goods they cannot produce - Reflect comparative advantage (allows nations to specialize and use resources more productively) - Create jobs - Establish and maintain good relations w/ other countries
answer
Why Nations Trade
question
The ability of an individual or group to carry out a particular economic activity. Example: The United States has a comparative advantage over other countries for producing airplanes, because we can produce them more efficiently.
answer
Comparative Advantage
question
A tax or duty to be paid on a particular class of import or export
answer
Tariff
question
A limited or fixed number of people or things
answer
Quota
question
1. Can force consumers to pay higher prices 2. Foreign produces can respond to quotas by establishing factories in the US
answer
Problems with trade barriers
question
An economic and political association of 28 European countries as a unit with internal fee trade and common external tariffs. - No trade barriers between countries - Many share the same currency (euro) exchange rate... The price of one nation's currency in terms of another: (As of 5/1/2014: 1 Euro = $1.39)
answer
European Union (EU)
question
North American Free Trade Agreement - Enacted to help remove trade barriers between Canada, Mexico, and the US - Some felt that this agreement allows companies to move to Mexico w/ lower wages, poor working conditions and a loss of jobs for the US - Some felt that this agreement will increase trade and stimulate our economic growth by putting low-cost goods on the market
answer
NAFTA
question
World Trade Organization An international body founded in 1995 to promote international trade and economic development by reducing tariffs and other restrictions. - Polices or oversees trade among nations - Provides assistance to developing countries - Helps settle trade disputes - Has been criticized for favoring large corporations
answer
WTO
question
The value of currency for the purposes of converting to another
answer
Exchange rate
question
The difference between the monetary value of exports and imports, the commercial net exports.
answer
Balance of Trade
question
When the value of a nation's imports exceeds its exports. A nation is buying more than they are selling. the US currently has a big trade deficit.
answer
Trade Deficit
question
When the value of a nation's exports exceed its imports. A nation is selling more than they are buying.
answer
Trade Surplus
question
Gross Domestic Product Market value of all final goods and services produced within a country in a given period. It is often considered an indicator of a country's standard of living. US's GDP is 16 trillion USD.
answer
GDP
question
A sustained increase in the general price level of goods and services in an economy over a period of time. Reduces purchasing power of money. May change consumer choices.
answer
Inflation
question
A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters/6 months - Results in loss of jobs - Further decline in the economy
answer
Recession
question
Federal Reserve - Central bank of the United States - Establish and maintain public confidence in the banking system - Safety of deposits - Keep inflation low, prices stable - Foster a healthy and growing economy - Does not manufacture money. Stores money. - When commercial banks need money, they order it from the nearest Federal Reserve bank. Ours is in Richmond, VA.
answer
FED
question
- Full service banks - Checking, savings, mortgages, car loans - ex. Bank of America, Suntrust, Capitol One - Commercial banks earn money by charging interest on stored money.
answer
Commercial Banks
question
- Originally created to loan people money to buy homes - Many failed in the 1980s - Today they are much like commercial banks
answer
Savings and Loans
question
- Not for profit. - Sponsored by large businesses, labor unions or government institutions. - Open to members and their family of the specific group - Lower costs - Same services as commercial banks
answer
Credit Unions
question
- Prices people pay to borrow money or are paid to lend money - Lower interest... people borrow more... save less - Higher interest... People borrow less... save more
answer
Interest Rates
question
This may appear on the SOL. Centrally Planned = Government Controlled = Command Economy
answer
Centrally Planned = Government Controlled
question
Someone who takes a risk to produce goods and services in search of profit.
answer
Entrepreneur
question
- Safe product - Be informed - Choice - Be heard - Redress (compensation for damaged or unsafe products)
answer
5 Consumer Rights
question
Federal Income Tax
answer
16th Amendment
question
- Coins... US Mint - Federal Reserve Notes... paper currency created by Bureau of Engraving and Printing - Deposits in bank accounts that can be accessed by checks and debit cards.
answer
3 Type of Money in the US
Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New