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45 Cards in this Set
- Front
- Back
PACED
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1.Problem
2.Alternatives 3.Criteria 4.Evaluate 5.Decide |
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Opportunity Cost
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cost of the next best alternative use of money, time or resources when making a choice
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Scarcity
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results from society not having enough resources to produce all the things people would like to have
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Need
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a basic requirement for survival
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Want
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something we would like to have--not necessary for survival
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Three Basic Economic Questions
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1.What to produce
2.How to produce 3.For whom to produce |
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GDP
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the dollar value of all final goods & services produced within a country's borders in a 12-month period
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GNP
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the dollar value of all final goods & services produced in one year with labor and property owned by a country's residents
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Monetary Policy
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actions by the federal reserve system to expand or contract the money supply in order to affect the cost and availabilty of credit
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Law of Demand
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a rule that states consumers will buy more of a product at a lower price and less of a product at a higher prices
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Law of Supply
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principle that more will be offered for sale at higher prices than at lower prices
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Factors of Production
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1. Land: natural resources
2. Capital: equipment 3. Labor: people/skills 4. Entrepreneurs: risk taker |
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Federal Reserve
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central banking system in the U.S. which conducts monetary policy to control the money supply
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elastic demand
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a change in price causes a larger quantity demanded
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inelastic demand
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change in price causes a smaller change in quanity demanded
**gas** |
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demand
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a quanity of a good or service that consumers are willing & able to buy at all possible prices during a given period of time
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supply
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amount of a product offered for sale at all possible prices
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inflation
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an increase in the average price level of all the goods and services produced in the economy
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buisness cycle
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regular ups and downs of real GDP
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unemployment
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working for less thatn one hour per week for pay in a non-family owned buisness
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CPI
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statistical series used to measure price changes for a representative sample of frequently used consumer items
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capitilism
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private ownership of resources
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free enterprise
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use of privately owned resources to earn profits
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diminishing marginal utility
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the idea that each additional item that we buy is less useful and gives us less satisfaction thatn the first
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Factors Affecting Demand
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1.Consumer Income
2.Consumer Tastes 3.Substitutes: price of product goes up, substitute goes down 4.Complements: price of one product goes up, complement goes down 5.Expectations 6.# of Consumers: increase in consumers will increase in demand |
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Changes In Supply
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1. Changes in the cost of resources
2. Productivity 3. Technology 4. Expectations 5. Government Regulations 6. # of sellers |
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surplus
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quanity supplied is higher than the quanity demanded
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national debt
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total amount borrowed from investors to finance the governments's deficit spending
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budget deficit
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a negative balance after expenditures are subtracted from revenues
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Federal budget
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annual plan outlining proposed exependitures and anticipated revenues
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Consumer Sector
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consists of all persons who occupy a living quarter
recieves its income in the form of disposable personal income |
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Investment Sector
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made up of proprietorships, partnerships, corporations
income comes from retained earnings |
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Government Sector
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includes all local, state, and federal levels of govt.
income comes from indirect business taxes, corporate income taxes, social security, and individual income taxes |
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Foreign Sectors
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includes all consumers and produces ouside the U.S.
represents the difference between the dollar value of goods sent abroad |
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Economic Freedom
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more than being able to buy the things you want
**people can choose their jobs, employers, and how they spend their $$ **buisness can choose what to sell/how much to charge |
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Voluntary Exchange
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the act of buyers and sellers freely and willingly engaging in market transactions
**buyers spend their $$ on a product they believe is worth more than $$ **ticket scalping |
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Private Property Rights
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fundamental feature of capitilism that allows individuals to own and control their possessions as they wish
**have the right to use and abuse their property as long as it doesn't interfere w/ others **owning a home/land |
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Profit Motive
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incentive that encourages people and organizations to improve their financil/material well-being
**free to risk and part of their wealth in a business venture **restaurant |
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Competition
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the struggle among sellers to attract consumers
**have the freedom to produce the products they think will be the most profitable **advertising |
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Characteristics of Free Enterprise
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1. Economic Freedom
2. Voluntary Exchange 3. Private Property Rights 4. Profit Motive 5. Competition |
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Productivity && Economic Growth
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1. Productivity
2. Economic Interdependence 3. Specialization 4. Divison of Labor 5. Investing In Human Capital |
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Productivity
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a measure of the amount of goods and services produced w/ a given amount of resources in a specific period of time
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Economic Interdependence
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mutual dependency of one person's firm's, regions or nations that can perform them more effieciently
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Divison of Labor
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a way of organizing work so that each individual worker completes a seperate part of work
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Investing In Human Capital
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the sum of people's skills, abilities, health, knowledge & motivation
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