Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
86 Cards in this Set
- Front
- Back
|
Self-Interest
|
buyers and sellers are focused on personal gain
|
|
|
Factor Market
|
firms purchase land, labor, and capital-- factors of production-- from households
|
|
|
Product Market
|
households purchase goods and services produced by firms
|
|
|
continuum
|
range with no clear divisions-- of economic systems
|
|
|
Public Disclosure Laws
|
require companies to give information about their products
|
|
|
In-Kind Benefits
|
goods and services provided for free or at very low prices
|
|
|
Public Good
|
shared good or service for which it would be inefficient or impractical to make consumers pay individually
|
|
|
Public Sector
|
part of the economy which involves government transactions
|
|
|
Private Sector
|
involves transactions of individuals and businesses
|
|
|
Externality
|
economic side effect of a good or service
|
|
|
Macroeconomics
|
study of behavior and decision making of entire economies
|
|
|
Microeconomics
|
study of economic behavior of individuals, families, and businesses
|
|
|
GDP
|
total value of all final goods and services produced in a year
|
|
|
Business Cycles
|
periods of macroeconomic growth followed by slowing or decline
|
|
|
Law of Demand
|
states that a good's price has an important effect on the amount of that good people will buy
|
|
|
Income Effect
|
takes place when consumer responds to a price increase by spending more on that good, even though it is more expensive. they spend more, but usually buy less
|
|
|
Demand Curve
|
illustrates quantity demanded at each price by consumers in the market
|
|
|
Elasticity of Demand
|
the way people respond to price changes
|
|
|
Inelastic
|
if you keep buying despite a price increase (gasoline)
|
|
|
Elastic
|
if you buy less after a small price increase (luxuries)
|
|
|
Total Reveue
|
amount of money the company receives by selling its goods
|
|
|
Law of Supply
|
states that the higher the price, the larger the quantity produced
|
|
|
Market Supply Curve
|
illustrates quantity supplied by all producers in a market at different prices
|
|
|
Elasticity of Supply
|
concept that predicts how suppliers react to price changes
|
|
|
Fixed Cost
|
does not change, no matter how much is produced (rent and machinery repairs)
|
|
|
Variable Cost
|
rises or falls depending on the quantity produced (raw materials and labor)
|
|
|
Total Cost
|
Fixed and Variable costs are added together to find _____ ____.
|
|
|
Marginal Product of Labor
|
change in output from adding one more worker
|
|
|
Increasing Marginal Returns
|
at the beginning, adding each worker will result in __________ ________ ________.
|
|
|
Diminishing Marginal Returns
|
At some point, adding each worker will result in ____________ ________ ________.
|
|
|
Marginal Cost
|
cost of producing onemore unit of a good
|
|
|
Marginal Returns
|
revenue gained from producing one more unit of a good- usually the price of a unit
|
|
|
Subsidy
|
government payment to support a business or market
|
|
|
Regulation
|
, or steps the government takes to control production, may also affect supply
|
|
|
Equilibrium
|
point at which quantity supplied and quantity demanded are equal
|
|
|
Disequilibrium
|
when quantity supplied does not equal quantity demanded at a certain price
|
|
|
Excess Demand
|
when quantity demandd is more than quantity supplied
|
|
|
Excess Supply
|
When quantity supplied is more than quanitity demanded
|
|
|
Price Ceiling
|
a maximum price that can be charged
|
|
|
Price Floor
|
lowest price that can be paid
|
|
|
Shortage
|
quantity demanded is greater than quantity supplied
|
|
|
Supply Shock
|
occurs when there is a sudden shortage of a good, such as wheat or gasoline
|
|
|
Rationing
|
is a system for allocating goods and services using tools other than price
|
|
|
Spillover Costs
|
air and water pollution, that 'spill over' into other people who have no control over how much of a good is produced
|
|
|
Perfect Competition
|
every firm produces the same product for about the same price
|
|
|
Barriers to Entry
|
factors that make it difficult for new firms to enter a market
|
|
|
Start-Up Costs
|
expenses an owner has to pay before opening new business
|
|
|
Monopoly
|
market dominated by a single seller
|
|
|
Natural Monopoly
|
market that runs most efficiency when one large firm provides all the output
|
|
|
Patent
|
gives a company exclusive rights to sell a new good or service for a specific time period
|
|
|
License
|
is a government issued right to operate a business
|
|
|
Monopolistic Competition
|
market in which many companies sell products that are similar but not identical
|
|
|
Nonprice Competition
|
competition through ways other than lower prices, to compete
|
|
|
Oligopoly
|
market dominated by a few large firms
|
|
|
Price Fixing
|
an agreement among firms to sell at the same or very similar prices
|
|
|
Predatory Pricing
|
setting market price below cost to drive competitors out of business
|
|
|
Antitrust Laws
|
prevent companies from reducing competition
|
|
|
Merger
|
when two or more companies form to join a single firm
|
|
|
Deregulation
|
lifting or reducing of government controls over a market
|
|
|
Money
|
anything that serves as a medium of exchange, a unit of account and a store of value
|
|
|
Medium of Exchange
|
anything used to measure value during exchange of goods and srvices
|
|
|
Unit of Account
|
money is a way to compare the value of goods and services
|
|
|
Store of Value
|
money keeps its value if you hold onto it
|
|
|
Representative Money
|
represents an object of value for which it can be exchanged
|
|
|
Flat Money
|
has value because government states that it is an acceptable means to pay debts
|
|
|
bank
|
institution for receiving, keeping, lending money
|
|
|
Federal Reserve System
|
served as the nations first true CENTRAL BANK, or bank that can lend to other banks in times of need
|
|
|
Money Supply
|
all the money available in the United States economy
|
|
|
Liquidity
|
means they can be used as cash or easily turned into cash
|
|
|
Money Market Mutual Funds
|
funds that pool money from small investors to purchase government or corportate bonds
|
|
|
Interest
|
price paid for the use of borrowed money
|
|
|
Investment
|
act of redirecting resources from being used today so that they can create future benefits
|
|
|
Financial System
|
makes investment possible by allowing transfer of money between savers and borrowers
|
|
|
Financial Intermediaries
|
institutions which help channel funds from savers to borrowers
|
|
|
Mutual Funds
|
pool savings from many and invest this money in different ways
|
|
|
Diversification
|
idea of spreading out investments to reduce risk
|
|
|
Return
|
money, such as interest, an investor receives above and beyond the sum of money initially invested
|
|
|
Maturity
|
end of that period, the isuer repays the par value- or the original amount of investment to the bondholder
|
|
|
Treasury Bonds
|
United States Treasury Department Issues ________ _____ and state and logcal governments
|
|
|
Corporate Bonds
|
to raise money and expand businesses
|
|
|
Capital Merkets
|
markets in which money is lent for longer than a year
|
|
|
Money Markets
|
markets in which money is lent for less than a year
|
|
|
Capital Loss
|
Investors who sell their stock for less than tey paid for it
|
|
|
Bull Market
|
when a stock market rises stadily over a pierod of time
|
|
|
Bear Market
|
when a stock market falls for a period of time
|
|
|
Speculation
|
high-risk investment with borrowed money in hope of big returns
|
