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42 Cards in this Set

  • Front
  • Back
is when there aren’t enough resources to supply the wants and needs of consumers. In other words, there is only a limited amount of gold in the world. The more scarce a good or service is, the higher the price will be
occurs when there is temporarily not enough of a resource to supply the wants and needs of consumers.
Factors of Production are used to produces goods and services. These include
1) Capital Resources
2) Human Resources
3) Land and Natural Resources
4) Entrepreneurship
5) Technology
the dollar value of the tradeoff we make.
Opportunity Cost
The combinations of goods and services that are chosen
Production Possibilities
Different countries have different types of economic systems or economies. The four main types of economies are
1) Traditional
2) Command
3) Pure Market
4) Mixed
a term, which refers to the economic, material well-being of people. It is measured by the average value of goods and services used by the average citizen during a given period of time, usually 1 year
Standard of Living
states that an increase in price causes a decrease in quantity demanded. In other words, the more something costs, the few of them we will buy.
Law of Demand
Several reasons determine what we buy and how much.
1) Price
2) Income Effect
3) Substitutional Effect
4) Diminishing Marginal Utility
a small change in the price of a good will drastically change demand for that good.
Elastic Demand
no matter how the price changes, our demand for a particular good stays the same.
Inelastic Demand
states that the producers will produce and sell more when the price of a good is higher and less when the price is lower.
Law of Supply
Costs to produce a good that do not change no matter how many of them you produce.
Fixed Cost
Costs to produce a good which goes up or down depending on how many units of the good you produce.
Variable Cost
money or other benefits the government gives to private businesses.
a government regulation that prevents prices from falling below a certain level (ex. minimum wage)
Price Floor
government regulation that prevents prices from rising above a certain level. (ex. postage stamps)
Price Ceiling
Businesses in a free enterprise system are commonly organized in three ways:
1) Sole Proprietorship
2) Partnership
3) Corporation
individuals who invest in a corporation by buying shares of stock.
Stocks earn money for stockholders in two ways:
1) selling stock for more than its purchase price
2) dividends
Four legal types of monopolies (and examples of each) that exist in the U.S. are:
1) Natural
2) Technological
3) Government
4) Geographical
public utility ( AT&T until 1984)
General Dynamics (Trident submarine)
US Post Office
General store in a remote area
when only a few producers dominate the production of an identical or similar product. Examples of this are oil companies, cereal companies, car manufacturers and airlines.
regulates unfair competition in interstate commerce and advertising fraud
Federal Trade Commission (FTC)
regulates purity and safety of foods, drugs, and cosmetics
Food and Drug Administration(FDA)
regulates TV, radio, and telephone.
Federal Communication Commission (FCC)
all people who are at least 16 years old and who are working or actively looking for work.
Civilian Labor Force
Five major issues that have traditionally been or are currently a part of labor movement in U.S. are:
1) Wages
2) Fringe Benifits
3) Working Hours
4) Grievence Procedure
5) Job Security
Two ways companies resist the demands of labor:
1) Lockout
2) Injuction
Unemployment is divided into four categories:
1) Frictional
2) Structional
3) Cyclical
4) Seasonal
Taxing and spending policies created by Congress; used to stabilize the economy
Fiscal Policy
Changing the money supply policies created by The Federal Reserve Bank; used to stabilize the economy.
Monetary Policy
the dollar amount of all final goods and services produced within our nation’s borders in a single year.
Gross Domestic Product (GDP)
Government has gotten bigger for several reasons:
1) A growing population in the U.S.
2) More national emergencies (tornadoes, hurricanes, Sept. 11)
3) Increase in the number of disadvantaged people
4) More government programs to help the citizens
The three broad categories of taxes in the U.S. and examples of each are:
1) Progressive
2) Regressive
3) Proportional
takes a larger percentage of income from high-income people than from low-income people—For example, federal income tax
takes a larger percentage of income from low-income people than from high-income people—For example, sales tax
take the same amount of tax from all people—For example some state income tax. Proportional tax is also known as a flat tax
Banks fulfill two needs in a community
a) Provide a safe place for people to deposit their money
b) Lend money individuals and businesses to buy goods and services