Economics 100 Terms – Flashcards

Unlock all answers in this set

Unlock answers
question
Scarcity
answer
the condition that occurs because people's wants and needs are unlimited while resources needed to produce services and goods to meet these needs and wants are limited
question
Basic Economic Questions
answer
"for whom to produce, what to produce, and how to produce"
question
Opportunity Cost
answer
the value of any alternative that you must give up when you make a choice
question
Production Possibilities Frontier (PPF)
answer
all possible combinations of two goods that an economy can produce in a certain period of time, under the conditions of present technology, no unemployed resources and efficient production.
question
Allocation
answer
the process of choosing which nedds will be met and how much of our resources will we use to satisfy them
question
Labor
answer
one of the resources used to produce goods and services - human factor of production
question
Capital
answer
produced goods that can be used as resources one for further production - the means of production including tools, offices, equipment, also the financial capital - money to acquire land and labor
question
Natural Resources (Land)
answer
In economics any material produced by nature that can be used to produce goods or provide services.
question
Trade Off
answer
The choice between alternative uses for a given quantity of a resource.
question
Specialization
answer
Concentrating the activity of a unit of production resource on a single task or operation.
question
Absolute Advantage
answer
The situation in which a country can produce more of a good than another co. can produce w/ same quantity of resources.
question
Comparative Advantage
answer
The situation in which a country can produce a good at a lower opportunity cost than another country.
question
Free Enterprise
answer
An economic system in which individuals own most, if not all, the resources and control their use.
question
Command (Social) Economy
answer
An economy in which the major economic questions are determined by the government representing the interests of the entire society.
question
Mixed Economy
answer
An economy system where the basic economic questions are resolved by a mixture of market forces with government direction (free enterprise and socialism).
question
Traditional Economy
answer
An economic system in which the basic questions are answered by social customs.
question
Market Economy
answer
An economy in which the economic questions are decided by the individuals in the marketplace.
question
Circular Flow
answer
A model of the economy that summarizes the flow if goods and services production from the four sectors -- households, businesses, government, and financial institutions.
question
Democratic Socialism
answer
An economic system where the means of production are mostly in private hands, marjet driven. Higher taxes to deal with social services provided by the state. Sometimes called a welfare state.
question
State Socialism (Communism)
answer
An economic system where means of production in the hands of gov't Economic decisions made by a central authority. All wages are set.
question
Capitalism
answer
An economic system where means of production are owned by private individuals to produce for profit. Production is determined by market forces.
question
Adam Smith
answer
Considered the Father of Modern Economics, wrote the "Wealth of Nations," this book was a major influence on our Founding Fathers and their pro free enterprise views coupled with limited government.
question
Law of Supply
answer
States that the quantity of goods supplied will be greater at a higher price than it will at a lower price. The relationship is direct.
question
Law of Demand
answer
States that the quantity demanded of a good will be greater at a lower price than it will be quantity demanded at higher prices. This is an inverse relationship.
question
Equilibrium Price
answer
the price at which the quantity demanded equals the quantity supplied
question
Market Price
answer
the prevailing price at which merchandise, securities, or commodities are sold.
question
Surplus
answer
the quantity supplied of an item at a given price exceeds the quantity demanded.
question
Alfred Marshall
answer
an economist whose book "Principles of Economics" had a major impact on the economics profession. Most known for defining the concepts of elasticity of demand.
question
Utility
answer
the satisfaction from consumption; sense of well-being
question
Elasticity
answer
measurement of the degree of the response of a change in quantity to a change in price.
question
Competition
answer
the rivalry between two or more businesses striving for the same consumer market.
question
Profit
answer
net returns after subtracting total costs from total revenue
question
Entrepreneurs
answer
individuals who take the risk of producing a product for a profit
question
Bond
answer
a certificate of debt stating the amount a corporation has borrowed from the holder and terms of repayment
question
Stock
answer
shares of ownership in a company
question
Mutual Fund
answer
financial organization that pools people's money and invests it
question
Broker
answer
one who acts as an agent for others in negotiating contracts, purchases or sales in return for a fee or commission.
question
Blue Chip Stock
answer
a stock that sells at a higher price because of public confidence in its long record of steady earnings
question
Preferred Stock
answer
the portion of a corporations stock having a priority or preference over the common stock in the distribution of dividends and assets, usually owned by employees
question
Bear Market
answer
an investor whose concerns in the stock market causes him to sell securities thinking the price will fall thus cutting losses.
question
Bull Market
answer
an investor whose concern in the stock market causes him to buy securities anticipating the price to rise thus making a profit.
question
Dividends
answer
the part of a corporation's income paid to its stockholders.
question
Investment
answer
an increase in the amount of productive capital in the economy.
question
Cooperative
answer
A business that provides services for its members and is not run for profit. Members pool their resources to gain some benefits not available to them as an individual.
question
Franchise
answer
a contract between by which a firm (corporation) that lets an individual (or group) use their name and sell their product, in return for payments being made and requirements being met.
question
Sole Proprietorship
answer
a form of business in which there is one owner
question
Partnership
answer
a type of business organization to which there are two or more owners.
question
Corporation
answer
an organization of people legally bound together through a charter to conduct some type of business
question
Unemployment
answer
the condition of those who are willing and able to work and actively seeking work but who do not currently work
question
Social Security Tax
answer
A tax that provides disability and retirement for most working people.
question
SDI- State Disability Insurance
answer
a partial wage-replacement insurance plan for California workers. It provides affordable, short-term benefits to eligible workers who suffer a loss of wages when they are unable to work.
question
Minimum Wage
answer
the lowest wage that can be paid for certain kinds of work
question
Unions
answer
an organization formed to protect the rights of workers
question
Salaries
answer
a fixed amount of money paid to a person on a regular basis
question
Downsizing
answer
restructuring a firm and decreasing its size to cost less, be more productive, and become a more efficient operation.
question
Interest Rates
answer
the price paid for the use of money, usually a % of total loan
question
Wages
answer
a payment for labor services
question
Collective Bargaining
answer
the process of having a union negotiates with management to determine the terms of employment for all workers rather than each individual
question
Monopoly
answer
a form of market organization in which there is only one seller of a product
question
Oligopoly
answer
a form of market organization of firms in the same industry acting together to make decisions
question
Cartel
answer
a formal organization of firms in the same industry acting together to make decisions
question
Merger
answer
a joining of two companies, when one co. buys more than 1/2 the stock in the other co. thus they act as one
question
John M. Keynes
answer
20th century economist who changed the way we thought about the economy. He opened doors to government inclement in the economy.
question
FDIC- Federal Deposit Insurance Corporation
answer
the agency that insures deposits of individual and businesses for up to $100,000 in the event of bank failure
question
Federal Reserve System
answer
the central banking system for the United States
question
Monetary Policy
answer
the changing of the quantity of money in the economy in order to reduce unemployment, keep prices stable and promote economic growth
question
Near Money
answer
assets - saving accounts that can be easily and quickly turned into money
question
Gresham's Law`
answer
an economic law stating that bad money drives good money out of circulation
question
Savings
answer
the unspent income that households do not spend on goods or services. Also sums of money stored or when prices are reduced.
question
Fait Money
answer
money not redeemable for anything intrinsic value, money declared by government decree
question
Currency
answer
a legal tender that is established by the government used as a value on the market
question
Stagflation
answer
occurrence of inflation and unemployment at the same time
question
Debt
answer
an obligation or liability to pay or render services, something owned for goods or services
question
Real GDP
answer
GDP that has been adjusted for price changes
question
GDP- Gross Domestic Product
answer
is the total dollar value of all goods and services produced by resources located in the United States during one years time
question
Appreciation
answer
a rise in value or price
question
Mortgage
answer
a pledge to a creditor as a security against a debt
question
Deficit
answer
the amount by which spending exceeds revenue for the year
question
Recession
answer
the condition in which unemployment is high and GDP falls for two or more consecutive quarters
question
Inflation
answer
a rise in the average level of prices
question
Deflation
answer
a decline in the average level of prices
question
IRS-Internal Revenue Service
answer
the agency in charge of collecting taxes for the US government
question
Assets
answer
an item of value that can be used to settle debt
question
CPI-Consumer Price Index
answer
a number used to calculate changes in the average level of prices for a number of items typically bought by urban families
question
COLA-Cost of Living Adjustment
answer
automatically adjusts employee wages to math inflation
question
Tax
answer
a charge imposed by the government on people or property for public purposes
question
Budget
answer
an estimation of expected income, expenses, and savings. It is the tool to help a person meet financial goals.
question
Fiscal Policy
answer
the changing of federal government spending and taxes in order to control the level of economic activity
question
NAFTA-North American Free Trade Agreement
answer
is a trade agreement between Mexico, US, and Canada to promote economic growth and prosperity for all three economics by eliminating barriers to free trade
question
Trade
answer
the business of buying and selling, conducting commerce, exchange goods
question
World Bank
answer
an organization established by UN at the end of WWII. The goal is to reduce poverty by strengthening economies of poor nations through monetary loans and other programs
question
Tariff
answer
a tax on imports
question
Quota
answer
a limit on the amount of imports or exports
question
Import
answer
goods or services that one country buys from another country
question
Barter
answer
a direct trade of goods or services
question
Exchange Rate
answer
the rate at which one type of money can be traded for another
question
Export
answer
goods or services that one country sells to another
question
Protectionism
answer
The use of trade barriers to protect a nations industries against foreign competition
question
International Monetary Fund
answer
was established to promote economic cooperation by maintaining an orderly system of world trade and exchange rates
question
WTO - World Trade Organization
answer
established in 1995. It was a global commerce agency with the same legal status as the United Nations. It is empowered to enforce global commerce rules with the imposition of economic sanctions.
Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New