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36 Cards in this Set

  • Front
  • Back
market
an arrangement that allows ppl to make exhanges with one another;wherever and whenever people voluntarily make exchanges with one another
voluntary exchange
process of trade that occurs in the market
market economy
using markets (voluntary exchange) as the primary means of organizing and coordinating production. AKA capitalism/free enterprise
intangible
services
tangible opposite of physical/mental labor
goods
human resources
mental, physical labor
capital resources
buldings, tools, and machines ppl use to create goods and services'one of the factors of production
opportunity cost
best alternative given up when making a choice
trade-off
a choice that involves giving up some of one thing to have more of another
what are the three pillars of free enterprise
1)private property
2)price system(use of prices to allocate scarce resources and allow ppl to make exchanges and establish prices)
3)market competition
command economy
a system which the basic economic questions of what to produce, how to produce, and who should recieve what is produced are generally answered by the government
what are three great things about money
1) it is a medium of exchange
2)storehouse of value
3)measure of prices
price effect
a decrease in price means an increase in demand
diminishing personal value
with every donut i have the next one will be less enjoyable even if it is free
a small price effect is inelastic
true/false
true, a small price effect is inelastic
a large price effect is
elastic/inelastic
inelastic
Price EFFECT V Demand
Income
Number of buyers
Substitutes
Expectations
Complementary goods
Taste
Season
how do you test for elasticity
if there is a five percent increase and then there is a/an [five percent] increase in the supply
liquidity
how easily savings can be converted to cash
rate of return
the percentage of interest or dividends earned or paid on the principal of an investment
bond
certificate of a corporation's or the government's indebtedness to the holder
corporate bonds
IOUs that corpoations issue when borrowing money for long periods of time
mutual funds
special investment companies in which ppl pool their savings to diversify their investments
principal
amount borrowed
the three C's of credit
Character
Capacity
Capital
S corporation
business that enjoys the advantages of a corporation without corporate taxes
bylaws
rules of oepration for a corporation stated in the chater that govern the corporate officers' actions
charter
document issued by a state government granting a corporation permission to operate
equity
ownership in a business
common stock
stock w/o voting privileges
preferred stock
a share in the ownership of a corporation that offers first rights to any dividends or a share of the assets if the corporation is liquidated
dividends
amount of interest earned from stock
prospectus
a statement containing financial information published when a corporation is about to issue new securities
balance sheet
a financial statement summarizing a firm's assets, liabilities and net worth at a given point in time
income statement
a summary of a firm's revenue, costs and taxes over a period of time
marginal revenue
additional income received from sales as production increases