9/19/07: St. John's; Eco-1302-0; Lawson; Quiz 1

Front 1

scarcity

Back 1

the shortage that exists when less of something is available than is wanted at a zero price

Front 2

economic good

Back 2

any item that is scarce

Front 3

free good

Back 3

a good for which there is no scarcity

Front 4

economic bad

Back 4

any item for which we would pay to have less

Front 5

resources, factors of production, or inputs

Back 5

goods used to produce other goods

Front 6

3 factors of production

Back 6

-land
-labor
-capita

Front 7

land (factor of production)

Back 7

all natural resources, such as minerals, timber, and water, as well as the land itself

Front 8

labor (factor of production)

Back 8

the physical and inteellectual services of the people, including the training, education, and abilities of the individuals in a society

Front 9

capital (factor of production)

Back 9

products such as machinery and equipment that are used in production

Front 10

what type of capital do owners of land recieve?

Back 10

owners of land recieve rent

Front 11

what type of capital do people who provide labor services recieve?

Back 11

people who provide labor services are paid wages

Front 12

what type of capital do owners of capital recieve?

Back 12

owners of capital recieve interest

Front 13

rational self-interest

Back 13

the means by which people choose the options that give them the greatest amount of satisfaction (the foundation of why people make choices)

Front 14

blanket definition of economics

Back 14

the study of how people choose to use their scarce resources to attempt to satisfy their unlimited wants

Front 15

positive analysis

Back 15

analysis of WHAT IS

Front 16

normative analysis

Back 16

analysis of what OUGHT TO BE

Front 17

fallacy of composition

Back 17

the mistaken assumption that what applies in the case of one applies to the case of many

Front 18

association as causation

Back 18

the mistaken assumption that because two events seem to occur together, one causes the other

Front 19

microeconomics

Back 19

the study of economics at the level of the individual

Front 20

macroeconomics

Back 20

the study of the economy as a whole

Front 21

independent variable

Back 21

a variable whose value does not depend on the values of other variables

Front 22

dependent variable

Back 22

a variable whose value depends on the value of hte independent variable

Front 23

direct, or positive relationship

Back 23

the relationship that exists when the values of related variables move in the same direction

Front 24

inverse, or negative, relationship

Back 24

the relationship that exists when the values of related variables move in opposite directions

Front 25

on what axis is price listed?

Back 25

-vertical axis

Front 26

on what axis is quantity listed?

Back 26

-horizontal axis

Front 27

slope

Back 27

the steepness of a curve, measured as the ratio of the rise to the run

Front 28

3 types of graphs

Back 28

-line graph
-bar graph
-pie chart

Front 29

what quadrant of the graph is mostly used in dealing with economics and why?

Back 29

the upper right quadrant is often used in economics, because most economics deals with positive numbers

Front 30

opportunity costs

Back 30

the highest-valued alternative that must be forgone when a choice is made

Front 31

rule of specialization

Back 31

individuals specialize in the activity in which their opportunity costs are lowest

Front 32

tradeoff

Back 32

the giving up of one good or activity in order to obtain some other good or activity

Front 33

production possibilities curve (PPC)

Back 33

a graphical representation showing all possible combinations of quantities of goods and services that can be produced using the existing resources fully and efficiently

Front 34

in dealing with the PPC, what happens when a point is beyond the curve?

Back 34

it is an impossible combination given current technology and resources

Front 35

in dealing with the PPC, what happens when a point is inside the curve?

Back 35

it is a case of underutilization

Front 36

in dealing with the PPC, how can we shift the curve out?

Back 36

change the conditions... in order to have more quantity and higher price, we can do things like develope new technology

Front 37

marginal cost or marginal opportunity cost

Back 37

the amount of one good or service that must be given up to obtain one additional unit of another good or service, no matter how many units are being produced

Front 38

gains from trade

Back 38

the difference between what can be produced and consumed without specialization and with specialization and trade

Front 39

comparative advantage

Back 39

the ability to produce a good or service at a lower opportunity cost than someone else

Front 40

private property rights

Back 40

the right of ownership

Front 41

what does private property rights have to do with trade?

Back 41

private property rights are necessary for voluntary trade to develop

Front 42

3 catagories of trade

Back 42

-voluntary trade enables people to get more than they could get by doing everything themselves (gain from trade)
-specialization and trade enable those involved to acquire more than they could if they did not specialize and engage in trade
-private property rights are necessary for voluntary trade to occur

Front 43

4 ways that scarce goods and resources can be allocated

Back 43

-first come first serve
-prices
-government
-random

Front 44

market

Back 44

a place or service that enables buyers and sellers to exchange goods and services

Front 45

barter

Back 45

the direct exchange of goods and services without the use of money

Front 46

double coincidence of wants

Back 46

the situation that exists when A has what B wants and B has what A wants

Front 47

demand

Back 47

the amount of a product that people are willing and able to purchase at each possible price during a given period of time, everything else held constant

Front 48

quantity demanded

Back 48

the amount of a product that people are willing and able to purchase at a specific price

Front 49

5 points to the law of demand:

Back 49

-the quantity of a well-defined good or service that
-people are willing and able to purchase
-during a particular period of time
-decreases as the price of that good or service rises and increases as the price falls,
-everything else held constant

Front 50

determinants of demand

Back 50

factors other than the price of athe good that influence demand

Front 51

5 determinants of demand

Back 51

-income
-tastes
-prices of related goods and services
-expectations
-number of buyers

Front 52

demand schedule

Back 52

a table or list of prices and the corresponding quantities dmeand for a particular good or service

Front 53

demand curve

Back 53

a graph of a demand schedule that measures price on the vertical axis and quantity demanded on the horizontal axis

Front 54

normal goods

Back 54

goods for which demand increases and income increases

Front 55

inferior goods

Back 55

goods for which demand decreases as income increases

Front 56

substitute goods

Back 56

goods that can be used in place

Front 57

complementary goods

Back 57

goods that are used together; as the price of one rises, the demand for the other falls

Front 58

market demand

Back 58

the sum of all individual demands

Front 59

supply

Back 59

the amount of a good or service that producers are willing and able to offer for sale at each possible price during a period of time, everything else held constant

Front 60

quantity supplied

Back 60

the amount that sellers are willing and able to offer at a given price during a particular period of time, everything else held constant

Front 61

5 points to the law of supple

Back 61

-the quantity of a well-defined good or service that
-producers are willing and able to offer for sale
-during a particular period of time
-increases as the price of the good or service increases and decreases as the price decreases
-everything else held constant

Front 62

supply schedule

Back 62

a table or list of prices and the corresponding quantities supplied of a particular good or service

Front 63

supply curve

Back 63

a graph of a supply schedule that measures price on the vertical axis and quantity supplied on the horizontal axis

Front 64

productivity

Back 64

the quantity of output produced per unit of resource

Front 65

how is market supply is found?

Back 65

by adding together the quantities supplied at each price by every producer in the market

Front 66

equilibrium

Back 66

the price and quantity demanded and quantity supplied are equal

Front 67

disequilibrium

Back 67

prices at which quantity demanded and quantity supplied are not equal at a particular price

Front 68

surplus

Back 68

a quantity supplied that is larger than the quantity demanded at a given price; it occurs whenever the price is greater than the equalibrium price

Front 69

shortage

Back 69

a quantity supplied that is smaller than the quantity demanded at a given price; it occurs whenever the price is less than the equilibrium price

Front 70

exhange rate

Back 70

the rate at which monies of different countries are exchanged

Front 71

price floor

Back 71

a situtation which the price is not allowed to decrease below a certain level

Front 72

price ceiling

Back 72

a situation in which the price is not allowed to rise above a certain level

Front 73

consumer sovereignty

Back 73

the authority of consumers to determine wht is produced through their purchases of goods and services

Front 74

private sector

Back 74

households, businesses, and the international sector

Front 75

public sector

Back 75

the government

Front 76

household

Back 76

one or more persons who occupy a unit of housing

Front 77

consumption

Back 77

household spending

Front 78

business firm

Back 78

a business organization controlled by a single management

Front 79

sole proprietorship

Back 79

a business owned by one person who recieves all the profits and its responsible for all the debts incurred by the business

Front 80

partnership

Back 80

a business with two or more owners who share the firms profits and losses

Front 81

corporation

Back 81

a legal entity owned by shareholders who liability for the firms losses is limited to the value of the stock they own

Front 82

multinational business

Back 82

a firm that owns and operates producing units in foreign countries

Front 83

5 types of businesses

Back 83

-business firms
-sole proprietorship
-partnership
-corporation
-multinational business

Front 84

investment

Back 84

spending on capital goods to be used in producing goods and services

Front 85

3 ways business can be organized

Back 85

-sole propietorships
-partnerships
-corporations

Front 86

imports

Back 86

products that a country buys from other countries

Front 87

exports

Back 87

products that a country sells to other countries

Front 88

trade surplus

Back 88

the situtation that exists when imports are less than exports

Front 89

trade deficit

Back 89

the situation that exists when imports exceeds exports

Front 90

net exports

Back 90

the difference betwen the value of exports and the value of imports

Front 91

formula for net exports

Back 91

net exports = exports - imports

Front 92

financial intermediaries

Back 92

institutions that accept deposits from savers and make loans to borrowers

Front 93

circular flow diagram

Back 93

a model showing the flow of output and income from one sector of the economy to another (also shows that the value of output is equal to income)

Front 94

economic efficiency

Back 94

a situation thin which no one in societ can be made better off without making someone else worse off

Front 95

technical efficiency

Back 95

producing at a point on the PPC

Front 96

market imperfection

Back 96

a lack of efficiency that results from imperfect information in the marketplace

Front 97

externalities

Back 97

the costs or benifits of a transaction that are borne by someone who is not directly involved in the transaction

Front 98

public good

Back 98

a good whose consumption by one person does not diminish the quantity or quality available for others

Front 99

free ride

Back 99

the enjoyment of the benefits of a good by a producer or consumer without having to pay for the good

Front 100

monopoly

Back 100

a situation which there is only one producer of a good

Front 101

business cycles

Back 101

fluctuations in the economy between growth and stagnation

Front 102

rent seeking

Back 102

the use of resources simply to transfer wealth from one group to another without increasing production or total wealth

Front 103

public choice

Back 103

the study if how government actions result from the self-interested behaviors of voters and politicians

Front 104

why does the government provide public goods?

Back 104

to avoid the free rider problem that would occur if private firms provided the goods

Front 105

monetary policy

Back 105

policy directed toward the control of money and credit

Front 106

federal reserve

Back 106

the central bank of the united states

Front 107

fiscal policy

Back 107

policy directed toward government spending and taxation

Front 108

transfer payment

Back 108

income transferred by the government from a citizen who is eaning income to another citizen

Front 109

budget surplus

Back 109

when excess that results when government spending is less than tax revenue

Front 110

budget deficit

Back 110

the shortage that results when government spending is greater than tax revenue

Front 111

centrally planned economy

Back 111

n economic system in which determines what goods and services are produced and the prices at which they are sold

Front 112

the 4 microeconomic functions of government

Back 112

-correcting externalities
-redistributing income from high income groups to lower income groups
-inforcing a competitive economy
-providing public goods

Front 113

role of the ferderal reserve in terms of economics

Back 113

to conduct monetary policy

Front 114

role of congess and the president in terms of economics

Back 114

to formulate fiscal policy

Front 115

what is the macroeconomic function of government?

Back 115

to control the economy through monetary and fiscal policy