question

Economics

answer

The study of choices that people make to satisfy their needs and wants.

question

Economist

answer

An expert in economics.

question

Microeconomics

answer

The choices made by economic actors such as households, companies, and individual markets.

question

Macroeconomics

answer

Examines the behavior of entire economies.

question

Consumers

answer

The people who buy things they need and want.

question

Producers

answer

The people who make the things that satisfy consumers' needs and wants.

question

Goods

answer

Physical objects that can be purchased.

question

Services

answer

Actions or activities that are performed for a fee.

question

Resources

answer

A resource is anything that people use to make or obtain what they need or want.

question

Factors of Production

answer

Resources that can be used to produce goods and services.

question

Natural Resources

answer

Items provided by nature that can be used to produce goods and provide services.

question

Human Resources

answer

Any human effort exerted during production.

question

Capital Resources

answer

The manufactured materials used to create products.

question

Capital Goods

answer

Buildings, structures, machinery, and tools used in the production process. Ex. Department stores, factories, dams, computers, and hammers.

question

Consumer Goods

answer

Capital goods are the manufactured resources that are used in making finished products. These finished products - the goods and services that people buy - are called consumer goods.

question

Technology

answer

The use of technical knowledge and methods to create new products or make existing products more efficiently.

question

Entrepreneurship

answer

The combination of organizational abilities and risk taking involved in starting a new business or introducing a new product.

question

Entrepreneur

answer

An individual who, rather than working as an employee, runs a small business and assumes all the risk and reward of a given business venture, idea, or good or service offered for sale.

question

Scarcity

answer

The combination of limited economic resources and unlimited wants results in a condition known as scarcity.

question

Productivity

answer

Is the level of output that results from level of input.

question

Efficiency

answer

The use of the smallest amount of resources to produce the greatest amount of output.

question

Division of Labor

answer

Assigning a small number of tasks to each worker.

question

Specialization

answer

Is when we concentrate on a product or task to increase the productive efficiency.

question

Trade-Off

answer

One good sacrifice for another.

question

Opportunity Cost

answer

The value of the next best alternative that is given up to obtain the preferred item.

question

Production Possibilities Curve

answer

Shows all of the possible combinations of two goods or services that can be produced within a stated

question

Exchange

answer

A process where producers and consumers agree to provide one type of item in return for another.

question

Barter

answer

Relies on bargaining and often results in complicated transactions. One set of goods traded for another.

question

Money

answer

An item that is readily accepted by people in return for goods and services.

question

Credit

answer

Allows consumers to use items before completing payment for the merchandise.

question

Value

answer

In order to avoid the problems of barter, goods and services are assigned a value that can be expressed as an amount of money, or price.

question

Utility

answer

Value is also determined by the degree to which a product has utility, or usefulness to a person.

question

Self-sufficiency

answer

It is demonstrated when people and society can fulfill all of their needs without outside assistance.

question

Inter-dependence

answer

A mutual reliance between people or things to satisfy needs and wants.

question

Traditional Economy

answer

s based on a society's values - its customs and traditions. In other words, the answers to the three economic questions are found in the past.

question

Traditional Economy

answer

Is based on a society's values - its customs and traditions. In other words, the answers to the three economic questions are found in the past.

question

Command Economy

answer

Relies on government officials to answer the three basic economic questions. Command economies may also be called planned economies.

question

Market Economy

answer

Individuals answer the three basic economic questions. The government has no say in what, how and for whom goods are produced, and the factors of production are owned by individuals. People can buy, sell, and produce anything they want.

question

Market

answer

A market is the free exchange of goods and services. The market provides the only form of control over what goods and services are bought and sold.

question

Self-interest

answer

An Incentive is something that motivates an individual to perform an action.

question

Mixed Economy

answer

Combines elements of traditional, market and command economic models to answer the three basic economic questions.

question

Authoritarian socialism

answer

Mixed economies that are closest to the pure command model said to practice authoritarian socialism, which is also known as communism.

question

Communism

answer

Mixed economies that are closest to the pure command model said to practice communism, which is also known as authoritarian socialism.

question

Capitalism

answer

Economies that practice closest to the market model. In an economy based on capitalism, individuals own the factors of production and answer the basic economic questions.

question

Democratic Socialism

answer

A type of mixed economy where the government owns some of the factors of production.

question

Free Enterprise

answer

A company or business that has little to no restrictions. Consumers can make their own choices with no government intervention.

question

Private Property

answer

Goods that are owned by individuals and by businesses, rather than by the government.

question

Contracts

answer

A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

question

Competition

answer

The economic rivalry that exists between among businesses selling the same or similar products. Competition is important because it encourages producers to improve existing products and develop new ones in order to attract customers.

question

Voluntary Exchange

answer

When producers and consumers unconditionally purchase and sell products, and they believe that the opportunity costs of such a trade are acceptable to both parties, the transaction is called a voluntary exchange.

question

Product Market

answer

Is where goods and services produced by businesses are sold to households. The households use the income they receive from the sale of resources to purchase the products. The money they spend is returned to the businesses as revenue.

question

Resource Market

answer

A resource market is a market where a business can go and purchase resources to produce goods and services. Resource markets can be distinguished from product markets, where finished goods and services are sold to consumers, and financial markets, where financial assets are traded.

question

Income

answer

The money paid to households by business firms and the government in exchange for the households' resources.

question

Full Employment

answer

The lowest possible level of unemployment in the economy.

question

Price Stability

answer

It is the other element of economic stability, and is achieved when the overall price level of the goods and services available in the economy is relatively constant.

question

Standard of Living

answer

Refers to people's economic well-being. Economists measure a nation's standard of living by how much the average person in that country is able to consume in a given period of time-usually one year.

question

Moral Incentives

answer

Moral incentives motivate people to do things on the basis of right and wrong. People are encouraged to do certain action because morally, it is the right thing to do.

question

Economic Incentives

answer

Economic incentives are what motivates you to behave in a certain way, while preferences are your needs, wants and desires. Economic incentives provide you the motivation to pursue your preferences.

question

Social Incentives

answer

Social incentive would mean your behavior or actions are motivated by your desire to conform to what others (society) do, so you can be accepted by others.

question

Coercion

answer

Improper use (or threat of improper use) of authority, economic power, physical force, or other such advantage, by a party to compel another to submit to the wishes of its wielder. Agreements entered into, or testaments signed, under coercion are considered illegal and invalid.

question

Penalty

answer

A punishment imposed for a violation of law.

question

Positive Incentive

answer

Positive incentives seek to motivate others by promising a reward.

question

Negative Incentive

answer

Negative incentives aim to motivate others by threatening a punishment.

question

Cheating

answer

To break a rule or law usually to gain an advantage at something.

question

Stocks

answer

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

question

Bonds

answer

An instrument of indebtedness of the bond issuer to the holders. It is a debt security, under which the issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay them interest (the coupon) and/or to repay the principal at a later date, termed the maturity date.

question

Mutual Funds

answer

An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors.

question

Stock Market

answer

The market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets.

question

Dow Jones

answer

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq.

question

Dividend

answer

A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.

Economics Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards