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31 Cards in this Set
- Front
- Back
Microeconomics
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The study of a single factor of an economy- such as individuals, households, businesses, and industries- rather than an economy as a whole
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Macroeconomics
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the study of an entire economy of one of its principal sectors
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Four factors of production
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Natural resources
Human resources capital resources entrepreneurship |
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Enterpreneurs
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someone who undertakes and develops a new business enterprise of develops a new product, risking failure
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Scarcity
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The fundamental condition of economics that results from the combination of limited resources and unlimited wants
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Invisible hand
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The exact phrase is used just three times in Smith's writings, but has come to capture his important claim that individuals' efforts to maximize their own gains in a free market benefits society
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Competition
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in business, a state of rivalry among sellers of the same or similar products
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Specialization
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the focus of a worker on only one of a few aspects of production in order to improve efficiency
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Demand
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the amount of a good or service that consumers are willing and able to buy at various prices during a given period
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Supply
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the amount of a good or service that producers ate willing to sell at various possible prices during a given period
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Demand curve
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a graphic representation of a demand schedule, showing the relationship between the price of an item and the quantity demanded during a given period, with all other things being equal
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Demand schedule
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a table that shows the level of demand for a particular item at various prices
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supply curve
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a graphic representation of a supply schedule, showing the relationship between the price of an item and the quantity supplied during a given time period, with all other things being equal
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supply schedule
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a table that lists each quantity of a product that producers are willing to supply at various prices
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Elastic demand
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the situation that exists when quantity demanded changes greatly in response to a change in price
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Inelastic demand
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the situation that exists when quantity demanded changes only slightly or not all all in response to a change in price
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Inelastic supply
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the situation that exists when quantity supplied changes only slightly or not all all in response to a change in price
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Elastic demand
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the situation that exists when quantity supplied changes greatly in response to a change in price
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Income effect
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the effect that a change in an item's price has a consumers' ability to purchase goods
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Surplus
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a situation in which the quantity supplied of an item at a given price exceeds the quantity demanded
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Shortage
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a situation in which the quantity demanded of a good or resource exceeds the quantity supplied
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Price floor
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a government regulation that sets a minimum price for a particular good
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Price ceiling
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a government regulation that sets a maximum price for a particular good
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Different economic systems
Traditional Command Market |
T: based on a society's values- its customs and traditions
C: relies on government officials to answer the 3 basic econ questions M: individuals answer the 3 basic econ questions |
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Adam smith and his economic philosphies
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Self-interest benefits all of society by helping the economy grow
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Law of Demand
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the principle that, all other factors being equal, consumers will purchase (demand) more of a good lower prices and less of a good at higher prices
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Income effect
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the effect that a change in an item's price has on consumers' ability to purchase goods
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Affirmative action
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a program, supported by law, requiring U.S. employers, labor unions, and other institutions to eliminate discrimination against women and minorities by increasing hiring
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COLA
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is the cost of maintaining a certain standard of living
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GDP
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is the market value of all officially recognized final goods and services produced within a country in a given period of time
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Business cycle and its phases
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are fluctuations, or changes, in a market system's economic activity
Phases: Expansion, or Recovery Peak Contraction, or recession Trough |