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60 Cards in this Set
- Front
- Back
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factors of production
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land, labor, capital
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opportunity cost
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most desirable alternative given up as result of decision
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societal goals
S&P E E F IG |
Security and Predictability
Efficiency Equity (fair wealth distribution) Freedom (from govt intervention) Innovation + Growth |
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efficiency
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making the most of resources
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regulating force
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competition
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motivating force
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self interest
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centrally planned economy
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-reaction to capitalism/industrialization
-classless society -govt controls factors of production -no private property, competition, free market pricing, consumer sovereignty - Max+Engels "Communist Manifesto" socialism/communism |
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socialism
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social/polit philosophy based on belief democratic means should be used to evenly distribute wealth among economy
state ownership of means of production/distribution Marx- transitional Sweden/Venezuela |
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Communism
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political system
centrally planned econ revolution central govt has most of the power |
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perestroika
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gradual restructuring
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how does govt encourage innovation
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funding research
govt's own programs (ie NASA) patents and copyrights |
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production capabilities curve
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shows alternate ways to use an economy's resources
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market economy
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decisions on production+consumption are based on voluntary market exchange
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competition
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rivalry among sellers to attract customers while lowering costs
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invisible hand
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describes self-regulating nature of the marketplace
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externality
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economic side effect that either helps/hurts someone other than the person who chose to produce/consume
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AFDC
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Aid to Families with Dependent Children
fed gives money to people w/kids..made them dependent |
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law of demand
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people buy more of something when price drops (+VV)
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demand schedule
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table listing quantity of a good a person will buy at each different price
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normal goods
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goods ppl demand more of when their incomes increase
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inferior good
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something ppl demand less of when income increases
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elasticity of demand
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measures how much consumers respond to price change
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inelastic
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demand relatively unresponsive to price change
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elastic
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demand sensitive to price change
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law of supply
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higher price= more produced
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elasticity of supply
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how quantity supplied reacts to a change in price
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marginal product of labor
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change in output from hiring one more worker
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marginal cost
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cost to produce one more unit of a good
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fixed cost
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doesn't change no matter how much of an item produced
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variable cost
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changes depending how much produced
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marginal revenue
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additional income from selling one more of an item
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best level of output
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marginal revenue= marginal cost
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subsidy
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govt payment supporting business/market
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equilibrium
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quantity suppied= quantity demanded
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price floor
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minimum price for g/s
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price ceiling
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max price that can be legally charged of g/s
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sole proprietorship
+ requirements |
business owned+managed by one person
1)business license 2) site permit 3)register business name |
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money characteristics
PUDDLA |
Portability
Uniformity Durability Divisibility Limited Supply Acceptability |
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S&P 500
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index that shows price changes of 500 stocks
broader than DOW |
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Dow Jones Industrial Average
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index showing how certain stocks have traded
companies change to represent market as a whole 30 companies, various industries |
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NYSE
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largest, most powerful
largest+ most established companies (blue chip) |
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deductions vs exemptions
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deduction- variable amounts you can subtract from gross income
exemption- set amount taken from income b/c of family, etc. |
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tax that's the main source of govt revenue
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income
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largest category of fed spending
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social security
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entitlement programs
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social welfare program peole are "entitled to" if they meet certain requirements....written into law
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mandatory vs discretionary spending
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mandatory- must pay by law
discretionary- changes from yr to yr depending on budget |
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main source of revenue for state govts
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sales tax
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main categories of state spending
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public safety, universities, police
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sin taxes
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taxes on bad things, ie cigarettes
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main source of funding for public elementary/high schools
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property taxes
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gross income
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income before deductions, etc...not necessarily what taxes are calculated on
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what can cash be invested into
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1)certificates of deposit
guaranteed interest rate, funds must remain for fixed period of time 2) money market accounts limited #of checks, floating interest rate 3)bank accounts savings, checking |
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Types of Bonds
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Junk (risky corp bond, cheaper)
Corporate (loan, not stock) Treasury bonds, notes, bills Savings (small:$50-10k, US govt) |
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Times
T-bill T-note T-bond |
bill- under 1yr
note- 1-10yrs bond- 10+ yrs |
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bond components
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1) par value- how much paid to buy bond (will get back at maturity)
2) coupon rate- how much interest you make 3) maturity- how long until you get $ back |
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mutual funds
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pooled money invested in stocks + assets
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revenue
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income received by a govt from taxes and nontax sources
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oligopoly
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market structure where few large firms dominate a market
ie soda, cereal |
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monopoly
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market dominated by single seller
public utilities, microsoft+windows |
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GDP
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gross domestic product
dollar value of all final g/s produced within a country's borders within a given year |
