Semester 1 Economics Review – Flashcards
Unlock all answers in this set
Unlock answersquestion
Why are unions important today?
answer
Played a major role in promoting legislation affecting wages and working conditions today, & have a membership of over 16.3 million people
question
How did the Great Depression affect the labor movement?
answer
Turned popular opinion in favor of unions
question
Right to work laws?
answer
A state law making it illegal to force workers to join a union as a condition of employment. (Prohibits mandatory union membership)
question
What is a modified union shop?
answer
Workers do not have to belong to a union to be hired and cannot be made to join one to keep their jobs
question
Labor mobility
answer
The ability and willingness of workers to relocate in markets where wages are higher
question
What is the traditional theory of wage determination
answer
Holds that differences in wage rates can be explained by supply and demand
question
What has minimum wage done since 1968
answer
In constant dollars, decreased
question
As far as labor, what did the civil rights act of 1964 do?
answer
Prohibited employment discrimination on the basis of gender, race, color, religion, and national origin. Established equal employment opportunity commission, and allowed the government to bring suit against a company for discrimination
question
What economic effects do taxes have?
answer
Changing consumer behavior, altering resource allocation, affecting a nation's productivity and growth
question
Three criteria for effective taxes
answer
Equity, simplicity and efficiency
question
Largest source of revenue for federal government is?
answer
Individual income tax
question
Largest source of revenue for state government is?
answer
Intergovernmental revenuex
question
What is a property tax?
answer
A tax on tangible and intangible possessions
question
What is a disadvantage of a value added tax (VAT)?
answer
It is invisible to consumers
question
What are the advantages of a flat tax?
answer
It's simple, closes or minimizes most loopholes, and it would reduce the need for accountants and larger portions of the IRS
question
What are transfer payments?
answer
Payment for which the government receives neither goods nor services
question
What are the effects of increased government spending?
answer
An indirect and direct change in the allocation of resources & an alteration in the distribution of income
question
What is discretionary spending?
answer
Programs that must receive annual authorization
question
Who formulated the federal budget?
answer
The president
question
What are examples of local government?
answer
School districts, municipalities, counties
question
Who pays for maintenance of state highways?
answer
The state
question
What are entitlement payments?
answer
Broad social programs for eligible individuals (ex: federal money given to a senior citizen as a social security payment)
question
What is the difference between federal departments and private departments?
answer
Federal departments are owed to ourselves, rather than to others. Federal government does not have to repay the debt by a specific date. Federal government does not lose purchasing power
question
What is the origin of the American dollar?
answer
The Spanish peso and Australian taler
question
What is the purpose of the gold standard?
answer
People feel more secure about their money and the government cannot print too much paper currency
question
What were greenbacks?
answer
Issued to raise money to finance the civil war, money named for the color of ink used to print it
question
What is the federal reserve system?
answer
System that functions as the central bank of the U.S. *it's publicly controlled
question
As far as banks are concerned, what happened because of the Great Depression?
answer
Bank reforms followed it, thousands of banks failed, and runs on banks were common
question
What must money be to be a successful medium of exchange?
answer
Portable, easily divisible, and durable
question
In regards to supply and demand what is a market?
answer
Pertains to price and quantity as well as producers and consumers
question
With other things being equal, what is the law of demand?
answer
Quantity⬆ Price ⬇️ Quantity⬇️ Price ⬆️
question
What relationship does the demand curve show?
answer
Various amounts of a good or service that consumers would be willing and able to buy at alternative prices
question
The relationship between quantity and price is?
answer
Price causes a change in QD in a demand curve
question
What do the income and substitution effect do?
answer
Bring change in QD
question
What is the substitution effect?
answer
Goods can be used in place of other goods
question
What is the primary variable influencing decisions to produce and purchase goods?
answer
Price
question
What are complementary goods? What happens with change in price?
answer
Products that are used with each other; one good will compensate in order
question
What are independent goods?
answer
A zero or near zero elasticity suggest that two products being considered are unrelated or independent goods
question
What will happen to demand for a complementary good?
answer
Causes one complementary good to increase or decrease in price and demand, one ⬆️ another ⬇️ causes a demand curve shoft
question
What is a normal good?
answer
Positive, more goods are demanded as income rises
question
What happens to demand if incomes increase
answer
Shifts in the demand curve
question
What is a decrease in demand? (On a graph/shift or move)
answer
Shift to the left
question
What is a decrease in quantity demanded? (On a graph/shift or move)
answer
Move along the curve
question
What is pure competition?
answer
Very large number of buyers and sellers (ex: seafood industry)
question
What is imperfect competition?
answer
Market structure that lacks one or more of the conditions of perfect competition (ex: oligopoly, monopoly)
question
In which economic structure is it hardest to enter: a new firm or business?
answer
Barrier to entry- firm
question
Pure monopoly
answer
Exists when a single firm is the sole producer of a product for which there are no close substitutes
question
Oligopoly
answer
Market structure in which a few large sellers dominate the industry. Hard to enter and exit the industry
question
Monopolistic competition
answer
Many firms sell a different product, into which entry is easy, firm has control over its product price and there is considerable improve competition
question
Pure competition
answer
Involved a large number of firms producing a standardized product, new firms. An enter and exit easily
question
Utility
answer
The capacity to be useful and provide satisfaction
question
Economics
answer
The branch of knowledge, concerning production, consumption and transfer of wealth
question
What does "there is no such thing as a free lunch" mean?
answer
Nothing in life is feee
question
What does studying economics do?
answer
Help people become better decision makers, understand the free enterprise system, and make wise choices for political candidates
question
What is the scientific method?
answer
The process used to study, explain, and analyze economic phenomena
question
What are economic models?
answer
A model representing economic processes
question
What are trade-offs?
answer
Alternative choices
question
What is the fundamental problem of economics?
answer
Scarcity
question
What is/are land resources?
answer
Natural resources (ex: bricks, the land used, etc.)
question
What is/are labor resources?
answer
Workers (ex: waiters, check-out clerks, etc.)
question
What is an entrepreneur?
answer
Person who starts their own business
question
The four factors of production?
answer
Labor, land, capital, entrepreneurs
question
What is a production possibilities curve (PPC)?
answer
Used to describe societies choice between two different goods
question
What will make a PPC shift outward?
answer
Advances in technology, changes in resources, more education or training, changes in the labor force
question
What is scarcity?
answer
A condition that results from society not having enough resources to produce all the things people would like to have
question
What is opportunity cost?
answer
The best next alternative use of money, time, or resources when one choice is made rather than another
question
What are the two main economic systems of today?
answer
Command and market system
question
What is the main feature of a command system?
answer
Central planning/communism
question
Hat is the main feature of a market feature?
answer
Wide-spread private ownership of capital
question
What does "laissez-fairs" mean?
answer
Government should not interfere with the operation of the economy
question
What does a circular flow model show?
answer
Illustrates the flow of goods and services through the economy
