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29 Cards in this Set

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Describe a Market economy?
all of the activities related to producing and consuming goods, and services, and how the decisions made by individuals, firms and governments determine the proper allocation of resources.
Define Microeconomics?
analyzes the market behaviour of individual consumers and firms, how prices are determined, and how prices determine the production, distribution, and use of goods and services.
Define Macroeconomics?
Focuses on the performance of the economy as a whole. It looks at the broader picture and to the challenges facing society as a result of the limited amounts of natural resources, human effort and skills, and technology.
How do consumers interact with the Economy?
They set out to maximize theu satisfaction or well-being within the limitations of their available resources- income from employment, investments or other sources.
How do firms interact with the Economy?
Set out to maximize profits by selling theur goods or services to consumers, governements or other firms.
How do Governments interact with the Economy?
Spend money on education, health care, employment training and the military. They oversee regulatory agencies and they take part in public works projects(highways/hydo-electric plants/airports)
What are the factors of production?
Labour, Natural resources, Capital and Entrepreneurship.
What is Labour?
the time and effort individuals dedicate to producing goods and services.
What are Natural resources?
Land,minerals,water, energy, and the so called "gifts of nature" used in the manufacturing process.
What is Capital? (Economics)
Includes the tools, machinery and instruments used to produce goods and services.
What is Entrepreneurship?
individuals who come up with the new ideas that help to propel our economy forwards.
What is a Market?
Any arrangement that allows buyers and sellers to conduct business with one another.
How do you determine the quantity demanded for a good or service?
the total amount consumers are willing to buy at a particular price during a given time period.
What are other factors that effect demand?
the price of related goods, consumer income levels, consumer tastes and preferences, and the population
How do you determine the quantity supplied for a good or service?
the total amount that producers are willing to supply ar a particular price during a given time period.
Define Market Equilibrium?
Occurs when the price consumers are willing to pay for a good matches the at which producers are willing to supply it.
What other factors effect supply?
The prices of inputs used in the production process(Labour/Natural resources/Capital etc) the prices of related goods, technology and the number of suppliers in the market.
Define Excess supply or surplus?
Consumers are willing to buy less than producers are willing to sell at prices above equilibrium. X
Define Excess demand or shortage?
Producers are unwilling to supply the market with adequate product at prices below equilibrium. X
Define economic growth?
is an economy's ability to produce greater levels of output over time and is expressed as the percentage change in a nation's gross domestic product (GDP) over a given period.
What is Gross Domestic Product (GDP)?
The market value of all the final goods and services produced within a certain country in a given time period usually a year or quarter.
What is a final good?
A finished product, one that is purchased by the ultimate end user.
What are the 2 ways of measuring GDP?
The expenditure approach which looks at total spending on final goods and services produced in the economy. The income approach which looks at the total income earned producing those goods and services.
What is Personal Consumption?
Measures the spending by households on goods and services produced in Canada and the rest of the world. It the largest component of GDP.
What is investment(economic)?
spending by businesses on capital goods, such as plant and equipment,or by consumers on the purchases of new homes. It also measures the change in business inventories during the year.
define Government spending?
Goods and services records the purchases by all levels of governements on such items as national defence,highway construction and public health,among others.
What is Net Exports?
The market value of exports, what Canadian firms sell to the rest of the world,minus the market value of imports,what Canadians buy from the rest of the world
Define Nominal GDP?
the dollar value of all goods and services produced in a given year at prices that prevailed in the same year, and is typically the amount reported in the financial press.
Define Real GDP(constant dollar GDP)?
The dollar value of all goods and services produced in a given year valued at prices that prevailed in some base year