Econ Set 1

Front 1

market economics (laissez-faire, "free market, orthodox economics)

Back 1

an economic system in which economic decisions are left to individual producers and consumers

Front 2

production inputs (land, labor, capital)

Back 2

the resources, or factors of production, used in the production of output by a firm

Front 3

rent

Back 3

the payment for use of a resource, whether it be land, labour, equipment, ideas, or even money. The term is often restricted to payment for use of land or equipment

Front 4

wages

Back 4

The portion of the national product that represents the aggregate paid for all contributing labor and services as distinguished from the portion retained by management or reinvested in capital goods

Front 5

profit

Back 5

the money earned by a business after subtracting its operation costs

Front 6

efficient allocation (efficient and scarcity)

Back 6

The process of dividing up and distributing available, limited resources to competing, alternative uses that satisfy unlimited wants and needs.

Front 7

opportunity cost

Back 7

the value of the next best alternative that is given up when making a choice; a measure of what you must give up to get what you want

Front 8

law of supply

Back 8

an economic law stating that as the price of a good or service increases, the quantity supplied increases, and vice versa

Front 9

law of demand

Back 9

an economic law stating that as the price of a good or service increases, the quantity demanded increases, the quantity demanded decreases, and vice versa

Front 10

price

Back 10

the amount of money that has to be paid to acquire a given product

Front 11

competition

Back 11

The effort of two or more parties to secure the business of a third party by offering, usually under fair or equitable rules of business practice, the most favorable terms.

Front 12

mortgage and subprime mortgage

Back 12

money borrowed to buy a house, an office building, land, or other real estate; A type of mortgage that is normally made out to borrowers with lower credit ratings

Front 13

stock exchange (Dow Jones, NSDAC, DAX)

Back 13

An exchange on which shares of stock and common stock equivalents are bought and sold

Front 14

Marxian Economics

Back 14

focuses on the role of labor in the development of an economy, and is critical of the classical approach to wages and productivity developed by Adam Smith; argues that the specialization of the labor force, coupled with a growing population, pushes wages down, and that the value placed on goods and services does not accurately account for the true cost of labor

Front 15

capital (means of production)

Back 15

the tools, machines, and buildings used to produce goods and services; one of the factors of production

Front 16

bourgeoisie (businessmen, entrepreneurs)

Back 16

the ruling class of the two basic classes of capitalist society, consisting of capitalists, manufacturers, bankers, and other employers. The bourgeoisie owns the most important of the means of production, through which it exploits the working class

Front 17

labor (proletariat, working classes)

Back 17

the time and effort people devote to producing goods and services in exchange for wages; one of the factors of production

Front 18

unions

Back 18

An organization intended to represent the collective interests of workers in negotiations with employers over wages, hours and working conditions.

Front 19

ideology

Back 19

a system of ideas which attempts to explain reality

Front 20

class struggle

Back 20

the struggle for political and economic power carried on between capitalists and workers

Front 21

left (pro-labor)

Back 21

support for social change to create a society with a more egalitarian structure; usually involve a concern for those in society who are disadvantaged relative to others and an assumption that there are unjustified inequalities

Front 22

right (pro-business)

Back 22

support for a hierarchically ordered society

Front 23

Keynesian economics

Back 23

argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and, therefore, advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle

Front 24

government intervention

Back 24

Actions on the part of government that affect economic activity, resource allocation, and especially the voluntary decisions made through normal market exchanges

Front 25

fiscal policy

Back 25

government policy regarding taxing and spending

Front 26

monetary policy

Back 26

central bank policy aimed at regulating the amount of money in circulation

Front 27

investment (planned investment)

Back 27

An asset or item that is purchased with the hope that it will generate income or appreciate in the future.

Front 28

interest rate

Back 28

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Front 29

consumption

Back 29

the value of goods and services bought by people

Front 30

price controls

Back 30

government-imposed limits on the prices that producers may charge in the market

Front 31

minimum wage laws

Back 31

Laws stating a wage below which employers may not legally pay employees for specific kinds of employment

Front 32

microeconomics

Back 32

the study of the economy at the level of individuals, households, and businesses

Front 33

macroeconomics

Back 33

the study of the workings of the economy as a whole

Front 34

value

Back 34

the worth of a good or service as determined by the market

Front 35

economic problem

Back 35

(1) that there's never enough resources to produce everything that everyone would like produced; people are not satisfied, we keep wanting more things (2) how absolute needs need to be met and with those needs met capitalism will not be needed any more