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49 Cards in this Set
- Front
- Back
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scarcity
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the condition that exists because people's wants and needs are unlimited while resources to fulfill these wants and needs are limited
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basic economic questions
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for whom to produce, what to produce, and how to produce?
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opportunity cost
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the value of any alternative that you must give up when you make a choice
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production possibilities frontier
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all possible combinations of two good that an economy can produce in a certain amount of time, under the conditions of present technology. No unemployed resources and efficient production.
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allocation
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the process of choosing which needs will be met and how much of our resources we will use to satisfy them
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labor
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one of the resources used to produce goods and services- human factor of production
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capital
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produced good that can be used as resources for further production
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natural resources (land)
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in economics any material produced by nature that can be used to produce goods or provides services
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trade off
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the choice between alternative uses for a given quantity of a resource
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specialization
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concentrating the activity of a unit of production resource on a single task or operation
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absolute advantage
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the situation in which a country can produce a good at a lower opportunity cost than another country.
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comparative advantage
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the situation in which a country can produce more of a good than another country can produce with the same quantity of resources
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free enterprise
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an economic system in which individuals own most, if not all, the resources and control their use
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command economy
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an economic system where the basic economic questions are answered by the government
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mixed economy
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an economic system where the basic questions are resolved by a mixture of market forces with government direction( free enterprise and socialism)
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traditional economy
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an economic system in which the basic economic questions are answered by social customs
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circular flow
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a model of the economy that summarizes the flow of goods and services production from the four sectors households, buisnesses, government, and financial institutions
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democratic socialism
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an economic system where the means of production are mostly in private hands, market driven. Higher taxes to deal with social services provided by the state. Sometimes called a welfare state
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state socialism (communism)
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an economic system where means of production are in the hands of the government. Economic decisions are made by a central authority and all wages are set
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capitalism
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an economic system where means of production are owned by private individuals to produce for profit. Production is determined by market forces
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Adam Smith
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considered the father of modern economic; wrote the book "wealth of nations"
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law of supply
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states that the quantity of goods supplied will be greater at a higher price than it will at a lower price. The relationship will be direct.
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law of demand
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states that the quantity demanded of a good will be greater at higher prices. This is an inverse relationship
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equalibrium price
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the price at which the quantity demanded equals the quantity supplied
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market price
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the prevailing price at which merchandise, securities, or commodities are sold
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surplus
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the quantity supplied of an item at a given price exceeds the quantity demanded
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Alfred Marshall
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an economist whose book "Principals of Economics" had a major impact on the economics profession
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utility
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the satisfaction from consumption, sense of well being
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elasticity
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measurement of the degree of the response of a change in quantity to a change in price
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competition
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the rivalry between two or more buisnesses striving for the same consumer market
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profit
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net returns after subtracting total costs from total revenue
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entrepreneurs
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individuals who take the risk of producing a product for profit
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bond
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a certificate of debt starting the amount a corporation has borrowed from the holder and terms of repayment
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stock
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shares of ownership in a company
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mutual fund
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financial organization that pools peoples money and invests it
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broker
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one who acts an agent for others in negotiating contracts, purchases or sales in return for a fee or commission
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blue chip stock
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a stock that sells at a higher price because of public confidence in its long record of steady earnings
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preferred stock
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the portion of a corporations stock having a priority or preference over the common stock in the distribution of dividends and assets, usually owned by employees
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dividends
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the part of a corporations income paid to its stockholders
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investment
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an increase in the amount of productive capital in the economy
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cooperative
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a buisness that provides services for its members and is not run for profit
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franchise
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a contract by which a firm (corporation) that lets an individual use their name and sell their product, in return for payments being made and requirements being met
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sole proprietorship
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a form of buisness in which there is one owner
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partnership
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a type of buisness organization which there are two or more owners
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corporation
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an organization of people legally bound together through a charter to conduct some type of buisness
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unemployment
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the condition of those who are willing and able to work but who do not currently work
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social security tax
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a tax that provides disability and retirement for most working people
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state disability insurance
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a partial usage replacement insurance plan for California workers
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minimum wage
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the lowest wage that can be paid for certain kinds of work
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