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53 Cards in this Set
- Front
- Back
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Capital good
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tool, equipment, or other manufactured good used to produce other goods and services; a factor of production. p. 12
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Need
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basic requirement for survival, includes food, clothing, and/or shelter. p. 6
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Service
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work or labor performed for someone; economic product that includes haircuts, home repairs, forms of entertainment. p. 13
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Durable good
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consumer goods that last three or more years without wearing out.
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Competition
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the struggle among sellers to attract consumers while lowering costs. p 48
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Profit
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extent to which persons or organizations are better off at the end of a period than they were at the beginning; usually measured in dollars. p 48
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Inflation
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rise in general level of prices . p 43, 350
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Social Security
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federal program of disability and retirement benefits that covers most working people. p 42
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Free Enterprise
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economy in which competition is allowed to flourish with a minimum of governemnt interference; term used to describe the American economy. p 46
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Depreciation
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gradual wear on capital goods during production. p 69
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Interest
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money made on money that is borrowed
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Net income
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measure of business profits after all expenses including taxes has been subtracted from revenues.
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Scarcity
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economic problem that results from a scarcity of resources and people's unlimited wants.
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Market demand curve
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demand curve that shows the quantities demanded by everyone who is interested in purchasing a product.
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Total revenue
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total receipts; price of goods sold times quantity sold.
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Law of supply
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rule stating that more will be offered for sale at high prices that at lower prices.
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Price ceiling
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maximum legal price that can be charged for a product
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Laissez faire
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philosophy that government should not interfere with the activities of business.
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patent
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government authorized permission to an individual or an organization to make, sell, or use something.
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copyright
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an exclusive legal right for an originator or assignee to print, publish, perform, film, or record literary, artistic or musical material.
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monopoly
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when one business buys out other smaller businesses and creates unfair competition.
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injunction
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a judicial order that restrains a person from effecting legal action
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closed shop
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illegal arrangement under which workers must join a union before they are hired
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arbitration
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agreement between two parties to place a dispute before a third party for a binding settlement.
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boycott
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protest in the form of a refusal to buy
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right to work law
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state law making it illegal to require a worker to join a union
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sin tax
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relativley high tax designed to raise revenue and discourage consumption of a socially undesirable product.
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property tax
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tax on tangible and intangible possessions like real estate, buildings, furniture, stocks, bonds, and bank accounts.
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tax loophole
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exception or oversight in the tax law allowing taxpayer to avoid taxes
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flat tax
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a percentage of taxes that are paid no matter what the income amount is.
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regressive tax
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tax where percentage of income paid in tax goes down as income rises
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tax return
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annual report filed with local, state or federal government detailing income earned and taxes owed.
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estate tax
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tax on transfer of property when a person dies
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medicare
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federal health care program for senior citizens regardless of income
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per capita
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means per person
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fiscal year
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12 month financial planning period that may not coincide with the calendar year
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entitlement
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program or benefit using established eligibility requirements to provide health, nutritional, or income supplements to individuals
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land
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natural resources not created by human effort, one of four factors of production
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GDP
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Gross Domestic Product; dollar value of all final goods, services, and structures produced within a country's national borders during a one year period
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entrepreneur
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risk taking individual in search of profits, one of the four factors in production
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paradox of value
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apparent contradiction between the high value of nonessentials and low value of essentials
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Is specialization an important factor in modern society?
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Yes, because specialization utilizes people with certain skills who can do one task while another does a completely different one, it increases production rather than everyone doing the same thing.
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Example of a supply and demand situation.
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An increase in supply in means more resources, with more resources you can create more products which would increase the demand. If Sally was growing corn, tomatoes, and squash for the farmers's market but got a bumper crop of squash she can sell more squash increasing the demand.
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Examples of improvements in our US standard of living since the 1950's.
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Health care, medicine, job benefits, technology, technological effiiciency (ex. washer and dryers)
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Advantage and disadvantage of a system of capitalism.
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With capitalism effeciency is one of the main advantages, if there are a number of buyers, sellers, reasonable amount of resources, and buyers and sellers that know how to make use of those resources, the resources will get used to the most efficient and profitable use. A disadvantage however is that it cannot always satisfy people's needs, it only provides for those who can pay for the products and goods of captialism, it does not appeal to the poor, unemployed, and the elderly.
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Advantage and disadvantage of socialism.
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An advantage is that even those who cannot draw income can still enjoy the benefits of society. A disadvantage is that socialism is less effecient, hiring more workers than needed, driving up the prices of the products.
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Is double taxation fair?
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No, it is not fair, even if the corporation is making a lot of money, and is doing well, just because it is considered to be a seperate legal entity they are taxing the same thing twice.
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What is the function of the "Better Business Bureau" in a community?
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The BBB is a non profit organization that is sponsored by local businesses that provides information on companies, it maintains records on consumer inquiries, and complaints and sometimes offers various consumer education programs.`
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Is the BBB a viable option to governemnt regulations?
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No, the government should have no regulation over the BBB because it is to protect the consumer, if it were to be regulated by the government they could alter information that if meant for the consumer to swing in their favor.
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The Law of Diminishing Returns.
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It is a law making use of technology when possible combining the same factors of production in a number of different ways to create the same product.
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What is the breakeven point?
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The breakeven point is when a business gets back the initial amount of money used to first invest in the business. Ex. Harry spent $100 to start his business, after selling his work he finally got back his $100, he broke even.
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What is a rationing system? Has the US ever used one?
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A rationing system is a system issued by the government to limit the amount of goods and products one person can buy, use of food stamps. The US used one during WWII, food stamps had to be used to buy certain goods like sugar.
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As a consumer how are you affected by product shortages?
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When there is a shortage in a certain product not only can we as the consumer not buy it, but the prices go up dramatically. This can endanger the future of that product if it continues because the consumer can no longer afford to buy it.
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