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;
33 Cards in this Set
- Front
- Back
- 3rd side (hint)
|
Scarcity |
A number of wanted but limited resources |
Oil, water, electricity |
|
|
Opportunity cost |
Next best alternative not chosen |
When you choose, you refuse |
|
|
PACED Decision making |
1)Problem 2)Alternatives 3)Important Criteria 4)Evaluate each Alternative 5)Make a Decision |
Has to do with cost |
|
|
Economic system: Market |
Decisions are made according to supply and demand |
Freedom of choice |
|
|
Economic system: Traditional |
Where resources are privately controlled. (Problematic) |
Oil |
|
|
Economic system: Command |
A central authority makes key economic decisions |
Big brother |
|
|
Economic system: Mixed |
Combination of market and command economies |
Big brother meets freedom of choice, conflict ensues. |
|
|
Supply and Demand |
Buyers and sellers interact in markets to allocate goods and services |
One is giving, the other is asking |
|
|
Price elasticity of demand |
Measurement of responsiveness of quantity demanded to change in product price |
Market structures |
|
|
Monopoly |
Single seller has control over a unique product |
Samsung, Motorola, Android, |
|
|
Oligopoly |
The chosen few firms control 70% of market |
Wall street |
|
|
Perfect competition |
Large number of sellers of same product |
Gum |
|
|
Monopolistic competition |
Fairly large number of sellers competing to sell slightly different products |
Video games |
|
|
Geographic monopoly |
When a firm is the only seller in area |
Willy Wonka chocolate factory |
|
|
Macroeconomics |
The study of the large economy |
Created to measure health of economy |
|
|
Unemployment |
People in labor force who want a job but aren't working |
Barney the dinosaur |
|
|
3 types of unemployment |
Frictional, structural, and cyclical |
Together they make up NRU |
|
|
Inflation |
Inflation is the rising general level of prices |
Reduces purchasing power of money |
|
|
Structural unemployment |
Changes in labor force make some jobs obselete |
Making string |
|
|
Determinants of supply and demand |
Quantity determines supply and price determines demand |
Quantity is price determinant |
|
|
Absolute advantage |
One nation produces at a less direct opportunity cost |
United States can use either turkey or chicken |
|
|
Comparitive advantage |
One country has lower indirect opportunity cost |
Opposite of absolute advantage |
|
|
Recession |
6 month period of decline in output, income, employment, and trade |
Happened when Willy Wonka closed factory |
|
|
Frictional unemployment |
Temporarily unemployed with transferable skills |
Donald Trump on the cheeseburger grill |
|
|
Seasonal unemployment |
Specific type of frictional unemployment due to time of year |
Frosty the snowman can't work in the summer |
|
|
Cyclical unemployment |
Unemployment that results from economic downturns (recessions) |
The great depression |
|
|
Fiscal policy types |
Contradictionary: laws that reduce inflation Expansionary: laws that reduce unemployment |
Like monetary policy |
|
|
3 functions of money |
Medium exchange: money can be used to buy g&s Unit of account: money measures value of all g&s Store of value: money allows storage of purchasing power |
EXCHANGE of ACCOUNTS increases VALUE |
|
|
Price/quantity equilibrium |
As price falls, quantity demand rises |
Quantity is price determinant |
|
|
Incentives |
Rewards or punishments depending on behavior (consequences) |
Ice cream or broccoli |
|
|
Positive incentives |
Good behavior brings good consequences |
Charlie Bucket returns the everlasting gobstopper to wonka, gets factory in return |
|
|
Negative incentives |
Bad behavior results in bad consequences |
If Charlie Bucket had kept his gobstopper he wouldn't have gotten the factory or the 10,000 pounds |
|
|
Perverse incentives |
Behavior results in unexpected consequences |
When Violet Beauregard ate the 3-course gum, she turned blue and bloated up |
