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135 Cards in this Set
- Front
- Back
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vocab
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barter to exchange goods and services without the use of money
competitor person or group that rivals another exchange to trade, or a market where buyers and sellers interact market place where buyers and sellers exchange goods and services market share a company's sales divided by the total sales in the industry over a certain period of time trade to exchange goods and services, with or without the use of money value an item's worth voluntary willing |
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market square
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A market square is a type of marketplace located near the center of town (sometimes near a town hall). For hundreds of years, people have been coming to market squares to sell goods, such as fruits and meats. Today, you can see market squares in many American cities.
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farmers' market
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A farmers' market is also a kind of market found throughout the country. This market is a wide-open space where farmers come to sell their produce to consumers. Buying goods from a farmers' market supports the local economy because the produce sold (fruits and vegetables) are grown nearby. When a consumer buys these goods, the money is transferred from the buyer to the seller. The seller is someone from the community (or nearby) who can then use this money to buy other goods and services within the local community.
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Stock markets
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Stock markets are found around the world. These markets are places where stocks and shares, or ownerships in a company, are bought and sold. Bonds, which are used by governments and corporations to borrow money, are also traded on stock markets. The most popular markets that trade stocks and bonds include the New York Stock Exchange, the National Association of Securities Dealers Automated Quotations (known as NASDAQ—this was the world's first major electronic stock exchange, also located in New York), the London Stock Exchange, and the Tokyo Stock Exchange. You may have noticed that most of these markets have the word "exchange" in them. An exchange is another word for a marketplace and refers to a market where buyers and sellers work out an agreed-upon price for an item.
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Currency
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Currency, or money, is also bought and sold in markets called Forex exchanges. You are already familiar with the U.S. dollar. But, this is just one kind of currency. In fact, there are more than 150 different currencies in the world. The Foreign Exchange, or Forex, allows for currency trading around the world, 24 hours a day, and seven days a week. This exchange trades 3.2 trillion dollars a day!
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A market _____.
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exists whenever buyers and sellers exchange goods and services
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Select the items that describe voluntary exchanges.
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trading money for a car
bartering baseball cards |
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When people buy something, they value it than it costs them. But, when people sell something, they value it than the payment they receive.
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more
less |
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vocab
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consumer person whose economic wants are satisfied by using goods and services
demand the willingness and ability of consumers to buy a good or service fad goods and services that become popular very quickly and then lose their popularity very fast investment something that people put their money into because they hope to make more money in the future return money earned on an investment |
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A consumer uses goods and services to _____.
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satisfy economic wants
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three questions involve the consumer:
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1.What goods and services will be produced?
2.How will these goods and services be produced? 3.Who will consume them? |
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Consumers influence how goods and services are made by _____.
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choosing which goods and services to buy
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Select the items that support the statement: Consumer preferences affect how producers make goods.
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buying organic products and non-GMO foods
purchasing products made from recycled materials consuming food made in a fair trade way |
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Gum and candy are often for sale right next to cash registers. This buying situation encourages consumers to use their money to _____make purchases.
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impulse
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vocab
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capital money used for an economic purpose, such as investment
entrepreneur person who organizes other productive resources to make goods and services innovation when an invention becomes usable in a way that has economic value invent to make a new product producer person who makes goods and services risk the chance that things will turn out differently than expected |
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Select all the items that describe an entrepreneur.
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can start new businesses
takes on risks can create jobs |
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Entrepreneurs and other sellers when buyers purchase the product they sell at prices more than high enough to cover the costs of production.
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earn profits
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Both the satisfaction of creating new products and the possibility of earning money are _____ for an entrepreneur.
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risks
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Select the true statement(s) about entrepreneurs.
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Entrepreneurs usually wind up making a lot of money.
A small business owner may be an entrepreneur and a producer. Entrepreneurs believe they can make a profit from their invention. |
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vocab
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labor human resource that is used to produce goods and provide services
productivity the amount of output that comes from a unit of input references people that comment on a person's character and qualifications salary price of labor, usually expressed on a yearly basis wage price of labor, often given on an hourly, daily, or weekly basis |
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vocab
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antitrust laws rules that prevent the creation and behavior of monopolies
legal contract agreement enforceable by law liability legal obligation to repay a debt property rights privileges of deciding how resources are used |
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vocab
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copyright sole right to publish or sell a form of artistic work
intangible something that cannot be touched intellectual property intangible assets that result from creativity patent sole right granted to an individual who invents a good or service piracy stealing intellectual property royalty payment to a person with a copyright or patent to use his or her product tangible something that can be touched trademark word(s), symbol, or design that identifies a certain good or service trade secret something that gives a producer an economic advantage over other producers |
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The U.S. government provides intellectual property rights by granting:
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1.patents
2.copyrights 3.trademarks 4.trade secrets |
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A movie writer can ____his movie script in order to benefit financially from his creation.
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copyright
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The government defines, establishes, and _____property rights.
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enforces
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vocab
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checking account bank service that allows a person to keep his or her money in the bank and to take out the money on demand
denomination paper money of a certain value exchange rate amount of one currency that can be traded for a unit of another currency minting the process of stamping out a coin from metal money items that are widely accepted as final payment for goods and services (also called currency) |
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When money is deposited in the bank for later use, it is a _____.
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store of value
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When you use paper money to pay for food, the money is a _____.
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medium of exchange
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When you compare the prices of two different pairs of shoes, money is a _____.
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unit of account
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Select the items that describe the benefits of coins and paper money.
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easy to carry
valuable easily divisible |
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vocab
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check a set of written directions that tells a bank how to use money to pay someone
exchange costs what is given up from trading or bartering monetary relating to money specialization focusing on one area |
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Money makes trading easier by replacing _____ with transactions involving paper money, coins, and checks.
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Bartering
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Select all the items that producers use to make goods and services.
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natural resources
human resources capital goods |
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Select the items that people consume to satisfy their economic wants.
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goods
money services |
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Select the statement that is not true about bartering
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Bartering encourages specialization.
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Money encourages specialization by decreasing the _______
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exchange cost
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vocab
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economies of scale decreasing the average cost of each good as output increases
financial capital money used for investments grant monetary aid given by another organization (such as the government or corporations) not-for-profit organizations organizations established mainly for religious, health, educational, civic, or social purposes |
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Select the producers that have earning profits as a main goal.
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small firms
corporations |
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Sally works for a big corporation because she wants to earn a high salary. Fred works for a not-for-profit organization because he wants to help people in medical need. This illustrates that the goals of different organizations affect _____.
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the benefits of the people who work for these businesses
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Corporations have more ways to raise ______ to pay for productive resources than small firms or not-for-profit organizations
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capital
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Select the organizations that use grants as a means to raise money. |
small firms
not-for-profit organizations |
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If an empty building costs nearly a million dollars to purchase, which organization would likely be the most able to purchase it?
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corporation
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vocab
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bank balance amount of money in a bank account
bond type of security that is issued for a certain amount depository institutions financial institutions whose funds come mainly from deposits interest price of money borrowed or saved loan money to be paid back under certain terms risk chance that things will turn out differently than expected |
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The cost of borrowing money is called _____.
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interest
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Simple interest is calculated as a percentage of the bank balance and interest already earned
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True
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Select the items that can result in higher interest earned.
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higher interest rate
higher balance |
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Select the items that are considered low risk investments.
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stocks
bonds |
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Individuals and companies respond to incentives in order to allocate their scarce resources in ways that provide the _____ possible returns to them
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highest
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vocab
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budget deficit amount of money that a government overspends in a certain amount of time
fiscal policy decisions to change spending or tax levels by the federal government public good item that can be used by everyone, provides benefits to more than one person at a time, and whose use cannot be restricted to only those people who have paid to use it taxes fees that the government charges on products, activities, or income |
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Select all the items that are public goods or services
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roads
education police force |
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The two main sources of government revenue are taxes and public ______.
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taxes and borrowing
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A budget deficit is the _____.
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amount overspent in a certain time
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What person or organization will usually supply goods and services when it appears that the benefits to society outweigh the costs to society?
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government
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Select the items that describe possible effects of incentives for political leaders.
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favor programs with immediate benefits
favor programs with immediate costs |
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vocab
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central bank a country's primary authority on areas related to money
Federal Reserve the central bank of the United States monetary policy the influence of the central bank on the growth of the money supply money supply currency, coins, and checking account deposits open-market operations when a central bank buys and sells securities to influence the growth of the money supply |
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The Federal Reserve is the central bank of _____.
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the United States
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Select the items that are jobs of the Federal Reserve
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manage risk in the financial markets
watch banks and protect customers |
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When the Federal Reserve influences the growth of the money supply, it is carrying out _______
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monetary policy
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Open-market operations are when the Federal Reserve buys and sells securities to influence the _____.
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money supply
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The Federal Reserve helps protect people who borrow money to pay an expense by _____.
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providing safe loans
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vocab
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antitrust laws rules that prevent the creation and behavior of monopolies
barter to exchange goods and services without the use of money consumer person whose economic wants are satisfied by using goods and services entrepreneur person who organizes other productive resources to make goods and services fiscal policy decisions to change spending or tax levels by the federal government interest price of money borrowed or saved labor human resource that is used to produce goods and provide services market place where buyers and sellers exchange goods and services monetary policy the influence of the central bank on the money supply money items that are widely accepted as final payment for goods and services (also called currency) producer person who makes goods and services trade to exchange goods and services, with or without the use of money |
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Select all the items that describe a kind of market participant.
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consumer
entrepreneur |
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Both trading and bartering _____.
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are voluntary exchanges
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Select all the items that describe the jobs of money
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store of value
unit of account medium of exchange |
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Select all the items that describe factors that market participants face as part of the decision process.
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costs and benefits
profit goals and laws |
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To help the economy grow, the federal government can _____.
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spend less money
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vocab
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consumer someone whose wants are satisfied by using goods and services
market economy economy in which market forces determine prices of resources and the prices and distribution of goods and services planned economy economy in which a central authority owns productive resources and distributes goods and services price cost of a good or service producer people who make goods and provide services |
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Select all the items that describe price
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what a producer receives from selling a good
what a consumer pays when buying a good |
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Your friend is a business owner in a planned economy. What decides how to allocate the productive resources he uses?
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central authority
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Your friend is a business owner in a market economy. What decides how to allocate the productive resources he uses?
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prices on production and consumption
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vocab
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collusion agreement between two or more people to limit competition and earn higher profits
competition contest between rivals customer service service provided to consumers during and after the buying process profit maximization profit level that earns the most money after expenses are paid quality degree of excellence for something, such as a product |
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When the light bulb industry went from being a single-seller market to a competitive market, the price of light bulbs ________ .
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decrease
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Competition in the cell phone market results in _____.
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better quality cell phones
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ABC Software charges a price for its video games that maximizes its profits. This company most likely functions in a _____ market
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competitive
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The shoe industry has many sellers, many buyers, and similar products. Shoe companies function in a________
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single-seller
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When Edison Electric Company and the Thomson-Houston Electric Company engaged in collusion, the two companies _______ the level of competition in their industry.
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reduced
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vocab
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equilibrium price price where quantity supplied equals quantity demanded
quantity demanded amount that consumers are willing and able to buy quantity supplied amount that producers will make and sell in the market survey gather data |
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vocab
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demand willing and able to consume
demand curve graph that shows the relationship between price and quantity demanded demand schedule table that shows the relationship between price and demanded law of downward-sloping demand when a product's price rises, the quantity of the product demanded decreases, and when a product's price falls, the quantity of the product demanded increases quantity amount |
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You go clothes shopping and find a great pair of jeans. They fit you perfectly, but they also cost $100. You are willing to buy them, but you only have $50 in your wallet to spend on new clothes. The pair of jeans _____ as demand for you.
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do not count
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You and a friend go clothes shopping and find a great pair of jeans. They fit you perfectly, but they also cost $100. You are willing to buy them, but you only have $50 in your wallet to spend on new clothes. Your friend likes the jeans and has the money to buy them. The jeans would count as a demand for _____.
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your friend, because he likes the jeans and has the money to buy them
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The price of your favorite soft drink just became lower. This means that you are likely to buy ______of the drink.
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more
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The price of gas just increased. This will most likely make people buy _____ gas in the future.
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less
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At a product's lowest price, you would expect people to demand the_______least of that product
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most
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In 1 or 2 sentences, explain the law of downward-sloping demand.
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If the price of cell phones decreases, then people demand more cell phones. If the price of cell phones increases, then people demand fewer cell phones. This is the law of downward-sloping demand.
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NOTES
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In this lesson, you've explored the demand for goods and services, in which consumers are both willing and able to buy products. You also learned that price and quantity demanded move in opposite directions. For example:
If the price of cell phones decreases, then people demand more cell phones. If the price of cell phones increases, then people demand fewer cell phones. This is the law of downward-sloping demand. Finally, you learned how the relationship between price and quantity demanded are shown in a demand schedule. In this problem set, you'll be asked to answer questions on these topics. |
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vocab
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complements goods that go together
demand willing and able to consume income money earned relative prices prices of a good or service compared to the prices of another product substitutes goods or services that can replace other goods or services |
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At the grocery store, you learn that the price of butter has increased by a lot. Many people respond by buying margarine. This makes the demand for butter _____ and the demand for margarine _____.
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decrease, increase
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The grocery store wants to increase the demand for ice cream cones, so it puts ice cream on sale. This shows that the grocery store owner thinks that ice cream and ice cream cones are _____.
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complements
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You just received a raise at work and consider meat a normal good. This means that your demand for meat will _____.
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increase
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Many people in the town of Oldenburg moved to find jobs in other cities. This led to a population decrease and a(n) _______in the demand for food.
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decrease
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Demand for surfboards in Southern California is most likely ______ than the demand for surfboards in Alaska.
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less
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Demand for surfboards in Southern California is most likely greaterless than the demand for surfboards in Alaska.
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In the case of a population decrease, the demand for clothing decreases. So, the demand curve moves to the left. This means that at any given price, there is less demand for clothing.
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NOTES
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In this lesson, you've explored the factors that influence the demand for goods and services, such as a price change in a good's substitute:
•If the price of gloves increases, then the demand for mittens increases. Or a price change in a good's complement: •If the price of tennis rackets increase, then the demand for tennis balls decreases. Or a change in income: •If income increases, the demand for cars increases (normal good). •If income increases, the demand for bus travel decreases (inferior good). You also learned about other factors, such as tastes, population, and climate, that affect the demand for goods and services. Finally, you took a look at how shifts in the demand curve look on a graph. In this problem set, you'll be asked to answer questions on these topics. |
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vocab
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marginal cost cost of producing one more unit of a good
marginal revenue money earned by producing one more unit of a good supply quantity of a good or service that producers make and sell in the market supply curve graph that shows the relationship between price and quantity supplied supply schedule table that shows the relationship between price and quantity supplied |
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If the marginal cost of making a good is $3.00, then you would supply the good if the price was _____.
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$4
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The main factors that determine quantity supplied are price and _____.
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costs of productive resources
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Your marginal cost is $4.00 and the market price for your good is $2.00. At this market price, you are willing to supply only ______goods.
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zero
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You produce cars. You are willing to supply the most cars at a price level of _____.
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$20
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A supply curve for the car industry would show the quantity of cars supplied at different _____.
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price
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In 1 or 2 sentences, explain how quantity supplied and price are related.
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•High prices for a good or service provide incentives (such as higher profits) for producers to make and sell more of the product.
•Lower prices for a good or service provide incentives (such as losing money) for producers to make or sell less of the product. |
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NOTES
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In this lesson, you've explored the world of supply, or the amount of a good or service that producers make and sell in the market. You learned about the factors that determine quantity supplied, such as the costs of production. Specifically, you looked at marginal cost, or the expense of making an extra good. Producers compare this cost to the marginal revenue, or money earned from making an extra good, to determine supply.
You also learned that supply and price move in the same direction: •High prices for a good or service provide incentives (such as higher profits) for producers to make and sell more of the product. •Lower prices for a good or service provide incentives (such as losing money) for producers to make or sell less of the product. Finally, you learned how to show the relationship between price and supply on supply schedules and supply graphs. In this problem set, you'll be asked to answer questions on these topics. |
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vocab
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input costs expenses of productive resources
interrelated markets markets that are connected in a mutual way production substitute good that can be used as a replacement for another good in the production process supply quantity of a good or service that producers make and sell in the market |
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You produce clothing, and the price of cotton just increased by a lot. As a result, you will most likely _____ your prices.
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raise
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Your business is dependent on gas to transport its goods. The price of oil decreases, which means your production costs ___
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stay the same
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Supply for clothing decreased, which means that suppliers will now supply ______the same clothes at each price level
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more
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An oil refinery makes both gasoline and diesel fuel. The price of gas has increased, which means that the supply of diesel fuel will most likely _____.
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increase
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Fifty new food businesses have entered the food market. The supply of food at each price level will _____.
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increase
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Suppose your production costs increased. In 1 or 2 sentences, describe the effect of this increase on the quantity of goods you supply.
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Supply is affected by a product's price: higher prices increase the supply of a product.
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NOTES
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In this lesson, you've learned about factors that influence supply. You know that supply is affected by a product's price: higher prices increase the supply of a product. You also learned about other factors that can change the supply of goods and services, such as changes in:
•Production Costs: Cars cost more to make Supply of cars decreases Cell phones cost less to make Supply of cell phones increases •Prices of Production Substitutes: Price of wheat increases Supply of corn decreases •Number of Sellers: More clothes stores open Supply of clothes increases Several grocery stores close Supply of food decreases You also learned about other factors, such as regulations, that can affect the supply of goods and services. Finally, you took a look at how shifts in the supply curve look on a graph. In this problem set, you'll be asked to answer questions on these topics. |
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vocab
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demand willing and able to consume
demand schedule table that shows the relationship between price and quantity demanded supply quantity of a good or service that producers make and put in the market supply schedule table that shows the relationship between price and quantity supplied |
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A producer charges $500 for a cell phone, but buyers are not buying any cell phones at this price. So at this price, the producer is willing to supply _____ phones, and consumers are willing to buy _____ phones.
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many,zero
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The cost of producing a new watch is $50. At a price of $100, watches will most likely be _____ and _____.
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supplied and demanded
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The cost of making a new skirt is $20. At a price of $15, consumers will demand 600 skirts, and producers will ___supply skirts.
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not supply
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Sixty new grocery stores opened. This will _____both the price and quantity of food in the marketplace.
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affect
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In 2 or 3 sentences, explain why putting the demand and supply schedules together can help you to see what price and quantities will be demanded and supplied in the marketplace.
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Looking at supply and demand together, you can see how many shoes will be both supplied and demanded at each price level. The producer can also choose a price that will allow consumers to buy the shoes—and at which he can make a profit
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NOTES
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In this lesson, you've explored what happens when supply and demand interact in the marketplace. You learned how consumers and producers respond to market signals. For example, suppose that a shoe producer charges a very high price for a new pair of shoes. If consumers respond by not demanding any shoes, then producers receive a signal to lower the price (or not sell the shoes).
You also learned how quantity supplied and quantity demanded at different price levels can be seen on a supply-and-demand schedule. On this schedule, you looked at the lowest price (where demand is greatest and supply is least) and at the highest price (where demand is least and supply is greatest). Finally, you learned how changes in supply and demand affect the quantities and prices of goods and services in the marketplace. In this problem set, you'll be asked to answer questions on these topics. |
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vocab
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equilibrium point point at which the supply and demand curves intersect
equilibrium price price at which quantity supplied equals quantity demanded excess demand more demand than needed excess supply more supply than needed |
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At a price of $50, consumers demand 1,000 pair of shoes, and sellers supply 500 pairs of shoes. At $50, there is _____.
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excess demand (demand is greater than supply)
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At a price of $100, consumers demand 450 pairs of shoes, and sellers supply 800 pairs of shoes. At $100, there is _____.
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excess supply (supply is greater than demand)
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At a price of $65, consumers demand 650 pairs of shoes, and sellers supply 650 pairs of shoes. At $65, there is _____.
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no excess supply or demand
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At a price of $65, consumers demand 650 pairs of shoes, and sellers supply 650 pairs of shoes. The price of $65 (where quantity supplied and quantity demanded both equal 650 pairs of shoes) is the _____.
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equilibrium price
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Consumers' incomes decrease, which causes a decrease in demand. This causes the equilibrium price to _____.
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decrease
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In 1 or 2 sentences, identify a change (either increase or decrease) in supply or demand that would cause the equilibrium price to increase.
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An increase in the supply of shoes decreases the equilibrium price for shoes and increases the equilibrium supply of shoes.
•changes in preferences or income; •changes in the prices or related goods or services; •changes in the number of consumers in the market |
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summing it up
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Supply or Demand Change Effect on Equilibrium Price Effect on Quantity Both Supplied and Demanded
Supply Increase Price Decrease Quantity Increase Supply Decrease Price Increase Quantity Decrease Demand Increase Price Increase Quantity Increase Demand Decrease Price Decrease Quantity Decrease |
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As you know, demand can change in the real world, too. Shifts in the demand curve can result from:
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•changes in preferences or income;
•changes in the prices or related goods or services; •changes in the number of consumers in the market. |
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NOTES
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In this lesson, you've explored the equilibrium price of goods and services, which is the price at which quantity supplied equals quantity demanded. Using a supply and demand schedule, you learned that there is excess demand at prices less than the equilibrium price. There is also excess supply at prices greater than the equilibrium price. Only at the equilibrium price is there no excess demand or excess supply.
You also learned how to locate an equilibrium point on a graph. This point is found at the intersection of the supply curve and the demand curve. It represents the equilibrium price and the equilibrium quantity for a specific market. Finally, you took a look at how equilibrium points change in response to changes in supply or demand. For example, an increase in the supply of shoes decreases the equilibrium price for shoes and increases the equilibrium supply of shoes. In this problem set, you'll be asked to answer questions on these topics. |
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vocab
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market-clearing price price at which quantity supplied equals quantity demanded (also known as the equilibrium price)
price ceiling when a price is set below the equilibrium price and not allowed to increase price floor when a price is set above the equilibrium price and not allowed to decrease shortage when buyers want to purchase more than the producers want to sell at the given price |
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There are more jeans in the stores than consumers are willing to buy, at the given price. This means that there is a _____ of jeans.
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surplus
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People are demanding more apartments than sellers are willing to offer. This means that there is a _____ of apartments.
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shortage
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Minimum wage and farming price control are examples of _____.
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price floors
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For several years in the late twentieth century, the government set the price of gasoline below the equilibrium price. This is an example of a _____.
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price ceiling
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In a free market economy, the decisions made by buyers and sellers push the price of a good or service toward the _____.
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equilibrium price
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In 1 or 2 sentences, explain the effect of a price floor on the quantity of a good.
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It is a minimum price for a good. This price is set above the equilibrium price. At this price, sellers are willing to supply more goods than consumers demand. Sometimes, businesses impose price floors. Other times, the government imposes price floors
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NOTES
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In this lesson, you've explored what happens when goods and services are sold for more or less than their equilibrium prices:
•Shortages are created when prices are below the equilibrium price. •Surpluses are created when prices are above the equilibrium price. You learned about price controls called price floors and price ceilings, which distort price signals and incentives of producers and consumers. You also learned about some real-life price controls, such as: •Price floors, including farming price controls, which set prices above the equilibrium level and cause surpluses. •Price ceilings, including rent and gasoline price controls, which set prices below the equilibrium level and cause shortages. Finally, you learned that price controls keep the market from charging equilibrium prices and from being efficient. In this problem set, you'll be asked to answer questions on these topics. |
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vocab
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complements goods that go together
consumer people whose wants are satisfied by using goods and services demand willing and able to consume demand schedule table that shows the relationship between price and demanded equilibrium price price where quantity supplied equals quantity demanded excess demand more demand than needed excess supply more supply than needed price cost of a good or service producer people who make goods and provide services Shortage when buyers want to purchase more than the producers want to sell at the given price substitutes goods that can replace other products supply quantity of a good or service that producers make and sell in the market supply schedule table that shows the relationship between price and quantity supplied Surplus when producers want to sell more than buyers want to purchase at the given price |
