Chap 1 & 2 & 3 Economics

Front 1

Scarcity

Back 1

the condition that results from society not having enough resources to produce all the things ppl would like to have

Front 2

economics

Back 2

study of how ppl try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources

Front 3

need

Back 3

basic requirement for survival and includes food, clothing, and shelter

Front 4

want

Back 4

way of expressing a need

Front 5

factors of production

Back 5

resources required to produce the things we would like to have, are land, capital, labor, and entrepreneurs

Front 6

Land

Back 6

“gifts of nature” natural resources not created by humans

Front 7

capital

Back 7

tools, equipment, machinery, and factories used in the production of goods and services

Front 8

financial capital

Back 8

money used to buy the tools and equipment used in production

Front 9

labor

Back 9

ppl with all their efforts, abilities, and skills

Front 10

entrepreneur

Back 10

a risk taker in search of profits who does something new with existing resources

Front 11

production

Back 11

process of creating goods and services.

Front 12

Gross Domestic Product (GDP)

Back 12

dollar value of all final goods and services, and structures produced within a country’s borders in a 12-month period

Front 13

Economic products

Back 13

goods and services that are useful, relatively scarce, and transferable to others

Front 14

good

Back 14

an item that is economically useful or satisfies an economic want, such as a book or car

Front 15

consumer good

Back 15

intended for final use by individuals

Front 16

capital goods

Back 16

when manufactured goods are used to produce other goods and services

Front 17

service

Back 17

work that is performed for someone

Front 18

value

Back 18

refers to a worth that can be expressed in dollars and cents

Front 19

paradox of value

Back 19

contradiction between necessities and value

Front 20

utility

Back 20

capacity to be useful and provide satisfaction

Front 21

wealth

Back 21

accumulation of products that are tangible, scarce, useful, and transferable from 1 person to the other

Front 22

Market

Back 22

location or other mechanism that allows buyers and sellers to exchange a certain economic product

Front 23

factor markets

Back 23

the markets where productive resources are bought and sold

Front 24

product markets

Back 24

markets where producers sell their goods and services to consumers

Front 25

economic growth

Back 25

occurs when a nation’s total output of goods and services increases over time

Front 26

productivity

Back 26

a measure of the amount of output produced by a given amount of inputs in a specific period of time

Front 27

division of labor

Back 27

takes place when work is arranged so that individual workers do fewer tasks than before

Front 28

specialization

Back 28

when factors of production perform tasks that they can do relatively more efficiently than others

Front 29

human capital

Back 29

sum of skills, abilities, health, and motivation of ppl

Front 30

economic independence

Back 30

rely on others, and others rely on us, to provide the goods and services that we consume

Front 31

trade-offs

Back 31

alt. choices whenever they make an economic decision

Front 32

opportunity costs

Back 32

cost of the next best alternative use of $, time or resources when 1 choice is made rather than another

Front 33

production possibilities frontier

Back 33

diagram representing various combos of goods and/or services an economy can produce when all productive resources are fully employed

Front 34

cost benefit analysis

Back 34

way of thinking about a problem that compares the costs of an action to the benefits received

Front 35

free enterprise economy

Back 35

one in which consumers and privately owned businesses, rather than the gov, make the majority of the WHAT, HOW and FOR WHOM decisions

Front 36

standard of living

Back 36

the quality of life based on the possession of the necessities and luxuries that make life easier

Front 37

economic system

Back 37

organized way of providing for the wants and needs of their ppl

Front 38

traditional economy

Back 38

allocation of scarce resources, and nearly all other economic activity, stems from ritual, habit, or custom

Front 39

command econommy

Back 39

one in which a central authority makes most of the what, how and for whom decisions

Front 40

marker economy

Back 40

ppl and firms act in their own best interests to answer the what, how, and for whom questions

Front 41

social security

Back 41

a fed. Program of disability and retirement benefits that covers most working ppl

Front 42

inflation

Back 42

a rise in the general level of prices

Front 43

fixed income

Back 43

and income that does not increase even though prices go up

Front 44

capitalism

Back 44

where private citizens, many of whom are entrepreneurs, own the factors of production

Front 45

free enterprise

Back 45

another term to describe American economy

Front 46

voluntary exchange

Back 46

the act of buyers and sellers freely and willingly engaging in market transactions

Front 47

private property rights

Back 47

the privilege that entitles ppl to own and control their possessions

Front 48

profit

Back 48

the extent to which persons of orgs. Are better off at the end of a period than they were at the beginning

Front 49

profit motive

Back 49

driving force that encourages ppl and orgs to improve their material well-being

Front 50

competition

Back 50

struggle among sellers to attract consumers while lowering costs

Front 51

consumer sovereignty

Back 51

describes the role of the consumer as sovereign, or ruler, of the market

Front 52

Sole Proprietorship

Back 52

a business run and owned by one person

Front 53

unlimited liability

Back 53

the owner is personally and fully responsible for all losses and debts of the business

Front 54

inventory

Back 54

a stock of finished goods and parts in reserve

Front 55

limited life

Back 55

the firm legally ceases to exist when the owner dies, quits, or sells the business.

Front 56

partnership

Back 56

a business jointly owned by 2 or more ppl

Front 57

limited partnership

Back 57

the limited partners have limited liability

Front 58

bankruptcy

Back 58

a court-granted permission to an individual or business to cease or delay debt payments.

Front 59

corporation

Back 59

form of business organization recognized by law as a seperate legal entity having all the rights of an individual

Front 60

charter

Back 60

a gov. document that gives permission to create a corporation

Front 61

stock

Back 61

ownership certifications in the firm

Front 62

stockholders
shareholders

Back 62

the shares are sold to investors

Front 63

dividend

Back 63

a check representing a portion of the corporate earnings

Front 64

bond

Back 64

written promise to repay the amount borrowed at a later date

Front 65

principal

Back 65

the amount borrowed

Front 66

interest

Back 66

the price paid for the use of another's money

Front 67

double taxation

Back 67

stockholders' dividends are taxed twice-once as corporate profit and again as personal income

Front 68

merger

Back 68

a combo of two or more businesses to form a single firm

Front 69

income statement

Back 69

a report showing a business's sales, expenses, and profits for a certain period

Front 70

net income

Back 70

subtracting all of the expenses, including taxes, from itsw revenues

Front 71

deprecation

Back 71

a non-cash charge firm takes for the general wear and tear on its capital goods

Front 72

cash flow

Back 72

the sum of net income and on-cash charges

Front 73

hortizontal merger

Back 73

when two or more firms that produce the same kind of product join forces

Front 74

vertical merger

Back 74

the kind of merger in which firms involved in different steps of manufacturing or marketing join together

Front 75

conglomerate

Back 75

a firm that has at least 4 businesses, each making unrelated products, none of which is responsible for the majority of the firm's sales

Front 76

multinational

Back 76

a corporation that has manufacturing or service operations in a number of different countries

Front 77

nonprofit organization

Back 77

an org. that operates in a business like way to promote the collective interests of its members rather than to seek financial gain for its owners

Front 78

cooperative/co-op

Back 78

a voluntary association of ppl formed to carry on some kind of economic activity that will benefit its members

Front 79

credit union

Back 79

a financial organization that accepts deposits from, and makes loans to, employees from a particular company or government agency

Front 80

larbor union

Back 80

an organization of workers formed to represent its members' interests in various employment matters

Front 81

collective bargaining

Back 81

union negotiations with managment over issues such as pay, working hours, health care coverage, and other job-related matters

Front 82

professional association

Back 82

a group of people in a specialized occupation that works to improce the working conditions, skill levels, and public perceptions of the profession

Front 83

chamber of commerce

Back 83

an organization that promotes the welfare of its members and the community

Front 84

Better Business Bureau

Back 84

A nonprofit org. sponsored by local businesses to provide general info on companies

Front 85

public utility

Back 85

investor- or municipal-owned company that offers an important product, such as water or electricty, to the public