Economics Ch 1-5

Front 1

Globalization

Back 1

the increasing integration of economies, cultures, and institutions across the world

Front 2

law of one price

Back 2

the wages of workers in one country will not differ significantly from the wages of equal workers in another institutionally similar country

Front 3

production possibility table

Back 3

a table that lists a choice's opportunity costs by summarizing what alternative outputs you can achieve with your inputs.

Front 4

PPC (production possibility curve)

Back 4

a curve measuring the maximum combination of outputs that can be obtained from a given number of inputs.

Front 5

comparative advantage

Back 5

the ability to be better suited to the production of one good than to the production of another good.

Front 6

productive efficiency

Back 6

achieving as much output as possible from a given amount of inputs or resources.

Front 7

principle of increasing marginal opportunity cost

Back 7

"in order to get more of something, one must give up ever-increasing quantities of something else"

Front 8

institutions

Back 8

the formal and informal rules that constrain human economic behavior

Front 9

market economy

Back 9

an economic system based on private property and the market in which, in principle, individuals decide how, what and for whom to produce

Front 10

private property rights

Back 10

the control a private individual or firm has over an asset.

Front 11

socialism

Back 11

an economic system based on individuals goodwill toward others, not on their own self intrest and in which, in principle, society decides what how and for whom to produce

Front 12

capitalism

Back 12

an economic system based on the market in which the ownership of the means of production resides with a small group of individuals called capitalists

Front 13

feudalism

Back 13

an eco. system in which traditions rule

Front 14

mercantilism

Back 14

an eco system in which govt determines the what how for whom decisions by doling out the rights to undertake certain economic activities

Front 15

Industrial Revolution

Back 15

a time when technology and machines rapidly modernized industrial production and mass produced goods replaced handmade goods

Front 16

entrepreneurship

Back 16

the ability to organize and get something done

Front 17

consumer sovereignty

Back 17

the consumer wishes determine whats produced

Front 18

sole proprietorships

Back 18

businesses that have ony one owner (easiest to start and have the fewest bureaucratic hassles)

Front 19

partnerships

Back 19

business with 2 or more owners (create possibilites for sharing the burden, but they also create unlimited liability for each of the partners)

Front 20

corporations

Back 20

businesses that are treated as a person, and are legally owned by their stockholders, who are not liable for the actions of the corporate "person". (the largest form of business when measured in terms of receipts. In corps, ownership is separated form control of the firm.

Front 21

stock

Back 21

certificates of ownership in a company

Front 22

limited liability

Back 22

the stockholders liability is limited to the amount the stockholder has invested in the company.

Front 23

households

Back 23

groups of individuals living together and making joint decisions

Front 24

monopoly power

Back 24

the ability of individuals or firms currently in business to prevent other individuals or firms from entering the same kind of business

Front 25

externality

Back 25

the effect of a decision on a 3rd party not taken into account by the decision maker

Front 26

macroeconomics externalities

Back 26

externalities that affect the levels of unemployment, inflation or growth in the economy as a whole

Front 27

private good

Back 27

a good that when consumed by one individual cannot be consumed by another individual

Front 28

merit good or activities

Back 28

goods and activities that government believes are good fr you even though you may not choose to engage in the activities or to consume the goods

Front 29

market failures

Back 29

situations in which the market does not lead to a desired result

Front 30

government failures

Back 30

situations in which the government intervenes and makes things worse

Front 31

global corporations

Back 31

corporations with substantial operations on both the production and sales sides in more than one country

Front 32

law of demand

Back 32

quantity demanded rises as prices falls, other things constant

Front 33

demand curve

Back 33

the graphic representation of the relationship between price and quantity demanded

Front 34

demand

Back 34

refers to a schedule of quantities of a good that will be bought per unit of time at various prices, other things constant

Front 35

quantity demanded

Back 35

a specific amount htat will be demanded per unit of time at a specific price, other things constant

Front 36

movement along a demand curve

Back 36

the graphical representation of the effect of a change in price on the quantity demanded.

Front 37

shift in demand

Back 37

the graphical representation of the effect of anything other than price on demand

Front 38

Shift factors of demand

Back 38

1. Society's Income
2. The prices of other goods
3. Tastes
4. Expectations.
5. Taxes on and subsides to consumers.

Front 39

market demand curve

Back 39

the horizontal sum of all individual demand curve

Front 40

law of supply

Back 40

quantity supplied rises as price rises, other things constant

Front 41

supply curve

Back 41

the graphical representation of a relationship between price and quantity supplied

Front 42

supply

Back 42

refers to a schedule of quantities a seller is willing to sell per unit at various prices, other things constant

Front 43

quantity supplied

Back 43

refers to a specific amount that will be supplied at a specific price

Front 44

movement along a supply curve

Back 44

the graphical representation of the effect of a change in price in the quantity supplied

Front 45

shift in supply

Back 45

the graphical representation of the effect of a change in a factor other than price

Front 46

market supply curve

Back 46

the horizontal sum of all individual supply curves

Front 47

equilibrium

Back 47

a concept in which opposing dynamic forces cancel each other out

Front 48

equalibrium quantity

Back 48

is the amount bought and sold at the equilibrium price

Front 49

equilibrium price

Back 49

the price toward which the invisible hand drives the market

Front 50

excess supply

Back 50

quantity supplied is greater than quantity demanded

Front 51

excess demand

Back 51

quantity demanded is greater than quantity supplied

Front 52

fallacy of composition

Back 52

the false assumption that what is true for a part will also be true for the whole.

Front 53

exchange rates

Back 53

the price of one countries currency in terms of anothers currency

Front 54

euro

Back 54

the currency used by 16 members of the EU

Front 55

price ceiling

Back 55

a government imposed limit on how high a price can be charged

Front 56

rent control

Back 56

a price ceiling on rents set by the government

Front 57

price floors

Back 57

government imposed limits on how low a price can be charged

Front 58

minimum wage laws

Back 58

laws specifying the lowest wage of firm can legally pay an employee

Front 59

excise tax

Back 59

a tax that is levied on a specific good

Front 60

tarriff

Back 60

an excise tax on an imported good.

Front 61

party-payer markets

Back 61

the person who receives the good differs from the person paying for the good.