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