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29 Cards in this Set
- Front
- Back
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Profit motive
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incentive to improve material well-being businesses individuals
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Legal equality
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principal that everyone has the same legal rights
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Interest group
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a private organization that tries to sway public officials to act in their benefit
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Eminent domain
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right of the government to take private property for public use
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Public interest
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the concerns of society as a whole
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Gross domestic product
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the total value of all final goods and services produced in a given year
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Business cycle
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period of expansion, or growth followed by a period of contraction, or decline
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Role of the government
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promotes innovation and invention
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Patent
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government license that gives the investor rights to produce and sell these products
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Work ethic
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commitment to the value of the work
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Public goods
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shared good or services, which would be inefficient or impractical to make consumers pay independently and exclude those who can't afford it
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Market failure
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the quantity of a product demanded by consumers does not equate to the quantities supplied by suppliers
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Externality
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it's a consequence of an economic activity that is experienced by unrelated third parties
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Welfare
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the provision of a minimal level of well-being and social support for all citizens
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Grant
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grants are types of financial aid that does not have to be repaid
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Demands
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the desire to own something and the ability to pay for it
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Law of demand
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when a good's price is lower, consumer will but it more; vice versa
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Substitution effect
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takes place when a consumer reacts to a rise in the price of one good by consuming less of that good and more of a substitute
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Income effect
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if you buy fewer things without increasing your purchases of other foods
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Demand schedule
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is a table that lists the quantity of a good that a person will purchase at various prices in a market
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Market demand schedule
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shows the quantities demanded at various prices by all consumers in the market
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Demand curve
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a graphic representation of a demand schedule
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What does market demand curve show
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cannot predict changing market conditions
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Inferior good
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are goods that you would buy in smaller quantities or not at all, if your income were to rise and you could afford something better
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Compliments
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they are two goods that are bought and used together
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Substitute
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are goods that are used in place of one another
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Elasticity of demand
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economists describe the way that consumers respond to price changes
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Inelastic
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if you buy the same amount or just little less of a good after a large price increase your demand is relatively unresponsive to price change
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Total revenue
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the amount of money the company receives by selling its goods
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