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;
44 Cards in this Set
- Front
- Back
|
What are the four types of resources? |
Kapital, Labour, Land, Entrepeneurial Ability |
|
|
What is economics? |
Choices when wants are unlimited and resources are scarce. |
|
|
Who are the decision makers? |
Households, Firms, Govnt, RoW |
|
|
Households ... |
are the consumers, they own the resources |
|
|
Firms... |
are suppliers, engage in production. |
|
|
Govnt... |
are the rule makers, enforcement agency. |
|
|
Factor Market is .. |
the resource market, where resources are bought and products are made. |
|
|
General Market is ... |
product market, where good and services are sold to households |
|
|
What are the two key assumptions? |
Ceteris Paribus (all other things equal or remaining the same) and rational self interest (want what is best for yourself not selfish) |
|
|
Example of labour |
Human effort, comes from natural resource time, paid in wage |
|
|
Example of capital resource |
buildings/equipment to produce goods, typically an investment |
|
|
Land Resources are ... |
any natural resource |
|
|
Opportunity cost |
the value of the next best alternative |
|
|
sunk cost |
cost that cannot be recovered |
|
|
perfect competition |
does not exist! |
|
|
comparative advantage |
when one person can produce at a lower opp. cost |
|
|
PPF Production Possibility Frontier |
The dividing line of a opp. cost curve, everything within is possible, outside not possible, on the curve is the most efficient |
|
|
Three Questions of an Economic System |
What to produce? How to produce? For whom to produce? |
|
|
Capitalism |
well defined private property, economy relies on the sales of individuals, the people run the economy, produce and buy |
|
|
Command economy/Communism |
The govnt has full control, based on 5 year plans, not effective |
|
|
Three types of comsumption |
durable goods, non-durable goods, services |
|
|
what is a transfer payment? |
benefits give to individuals by the govnt (EI and CPP) |
|
|
What is a partnership? |
firms with multiple owners |
|
|
What is a corporation? |
Legal entity owned by shareholders |
|
|
What is a cooperative? |
Pooled resources to buy and sell more efficiently (farms who share equipment) |
|
|
What is a consumer cooperative? |
owned and operated by the clients (requires annual fee or hours of work) |
|
|
What is a producer cooperative? |
producers join force to buy supplies and equipment to market output (reduce cost improve profit) |
|
|
What is a Worker Cooperative? |
Owned by workers, workers share all profit |
|
|
What is the invisible hand? |
promotes efficient allocation of resources to avoid collusion (fixed pricing) |
|
|
What is a monopoly? |
sole supplier of a product, no close substitute. |
|
|
Natural monopoly |
one firm that supplies market at lower price than two or more can |
|
|
externality |
a cost or benefit that does not effect the buyer or seller from bad pollution too good education |
|
|
fiscal policy |
use of govnt assets to affect economy wide variables like inflation |
|
|
Tax Principle - ability to pay |
those with higher income should pay more tax |
|
|
Tax Principle - benefits received |
those who receive more benefits should pay more tax |
|
|
Tax Incidence |
distribution of tax burden among tax payers indicates who ultimately pays tax |
|
|
progressive taxation |
as income increases , percentage of taxable income increases |
|
|
proportional taxation |
the tax as a percentage of taxable income remains the same as income goes uo
|
|
|
marginal tax rate |
percentage of each additional dollar that goes to tax |
|
|
regressive taxation |
the tax as a percentage of income goes down as income goes up |
|
|
merchandise trade balance |
the value during a given period of countries exported goods minus the value of imported goods |
|
|
balance of payments |
record of all economic transactions during a given period between residence of one country and the rest of the world |
|
|
tariffs |
tax on imports |
|
|
quota |
legal limit on the quantity of a product that can be imported or exported |
