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45 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is the study of economic behavior & decision-making of small units (individuals, families, households & businesses)?
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Microeconomics
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Micro means "small"
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What is the study of economic behavior & decision-making of entire economies, government/corporations?
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Macroeconomics
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Macro means "large"
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What Diagram shows how individuals & businesses exchange money, resources, and products?
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Circular Flow Diagram
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Market System (No Gov't Safetyu Net) Mixed-Market System w/ Safety Net
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Firms purchase/rent land (natural resources) . They hire workers, paying them wages/salaries for their labor. Also, firms borrow money from Households to purchase capital, paying HHs interest or profits in return.
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Factor Market
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the arena of exchanges between firms & households
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Which market allows the goods and services that firms produce to be purchased by Households?
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Product Market
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the arena of exchange between producers who make things and consumers who buy things
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Money paid to workers for their labor.
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wages
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workers earn _______ from firms in return for their Labor.
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What is trade ?
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Barter
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this requires a "double coincidence of wants"
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What is anything that buyers and sellers are willing to accept as payment?
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Medium of Exchange
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In the past various cultures accepted shells, beads, feathers, salt, livestock, etc. as forms of payment. Today, we use debit cards, checks, credit cards, etc. as payment.
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What allows us to compare the economic value of different goods and services?
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Standard of Value
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People in a market economy use this to know the relative prices of goods & services & how they must work or save in order to purchase them. How many quarts of strawberries at $2./qt.could purchase a $200 TV?
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Money paid to lenders by businesses who borrow for capital investments
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interest
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Any loan from a lender (banks/individuals) requires repayment with _________ (percentage of principal ($)borrowed you must pay for the loan over time)
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income from households that flows back to businesses
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profit
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firms use profits to buy more resources in the factor market
so they can produce more products for HHs to buy |
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Money can be saved over time to be spent later, without a loss of its value.
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Store of Value
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Money is not perishable like fish or fruit. It only loses its value through Inflation! Damaged money is shredded by the Federal Reserve Bank and replaced with new money.
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Why does money need to be Durable, Portable, Divisable, Uniform, Limited in Supply and Acceptible by All.
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Six Characteristics of Money
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Durable - long lasting; Portable - easily carried, Divisible - separated many ways ; Uniform - unchanging in appearance;
Limited in Supply - to prevent inflation & devaluation; and Acceptable - accepted by everyone |
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Government collects taxes from the workers to provide goods & services to public
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Government's role in the Circular Flow of Resources
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Gov't purchases land, labor & capital from HHs in the Factor Market while purchasing goods & services in the Product Market
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Money paid to Landlords for the use of their lands or property.
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rent
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money can be exchanged for rental space, housing, land, etc.
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Government collects taxes from the workers to provide goods & services to public
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Government's role in the Circular Flow of Resources
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What is the study of economic behavior & decision-making of small units (individuals, families, households & businesses)?
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Microeconomics
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Micro means "small"
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Money paid to workers for their labor.
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wages
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What is the study of economic behavior & decision-making of entire economies, government/corporations?
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Macroeconomics
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Macro means "large"
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Money paid to lenders by businesses who borrow for capital investments
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interest
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What Diagram shows how individuals & businesses exchange money, resources, and products?
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Circular Flow Diagram
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Market System (No Gov't Safetyu Net) Mixed-Market System w/ Safety Net
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income from households that flows back to businesses
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profit
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firms use profits to buy more resources in the factor market
so they can produce more products for HHs to buy |
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Firms purchase/rent land (natural resources) . They hire workers, paying them wages/salaries for their labor. Also, firms borrow money from Households to purchase capital, paying HHs interest or profits in return.
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Factor Market
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Government collects taxes from the workers to provide goods & services to public
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Government's role in the Circular Flow of Resources
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Which market allows the goods and services that firms produce to be purchased by Households?
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Product Market
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Money paid to Landlords for the use of their lands.
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rent
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Money paid to workers for their labor.
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wages
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Money paid to lenders by businesses who borrow for capital investments
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interest
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income from households that flows back to businesses
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profit
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firms use profits to buy more resources in the factor market
so they can produce more products for HHs to buy |
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Government collects taxes from the workers to provide goods & services to public
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Government's role in the Circular Flow of Resources
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What is trade?
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Barter
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Requires a "double coincidence of wants"
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What is anything in an economy that buyers & sellers are willing to accept as payment?
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Medium of Exchange
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Besides Money, shells, beads, feathers, salt & livestock are used in other cultures. Today, checks, debit/credit cards are used
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What allows us to compare the economic value of different goods & services?
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Standard of Value
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helps people know the relative prices of goods/services in Market economy & how long they must work/save to purchase them
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What allows us to save money & spend it later?
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Store of Value
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unlike food is nonperishable & doesn't lose its value over time: except through INFLATION!
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What needs to be durable, portable, divisible, uniform, limited in supply & acceptible by all
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Six Characteristics of Money
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It should last a long time, be easy to carry, divided in various ways, standardized by appearance, right amount in circulation & taken as payment by all
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