Economics Midterm Review

Front 1

which type of business usually have no competition?

Back 1

public utilities

Front 2

corporations involved in different steps of manufacturing or marketing that merge

Back 2

vertical merger

Front 3

what are the factors of production

Back 3

land, labor, capital, entrepreneurs

Front 4

what are the characteristics of a market economy

Back 4

individual freedoms, consumers decide what is produced, does not provide for everyones basic needs, adjusts to change gradual

Front 5

what are benefits of entrepreneurship?

Back 5

increased competition, higher profits, more and better paying jobs, healthy tax revenues

Front 6

what model is used to ilustrate the concept of opportunity cost?

Back 6

production possibilities curve

Front 7

who is regarded as a risk-taker in the economy in search of profits?

Back 7

entreprenuers

Front 8

corporations that produce the same kind of product that merge

Back 8

horizontal mergers

Front 9

define economics

Back 9

study of efforts to satisfy unlimited wants with scare resources

Front 10

what are the characteristics of free enterprise economy?

Back 10

voluntary exchange
competition
profit motive
private property
economic freedom

Front 11

in what type of economy is competition allowed to flourish with minimal government intervention?

Back 11

free enterprise

Front 12

define trade-offs

Back 12

alternative choices by consumers in the market place

Front 13

A firm that has at least four businesses, each making unrelated products, none of which is responsible for a majority of its sales

Back 13

conglomerate

Front 14

define partnership

Back 14

business jointly owned by two or more persons

Front 15

define inflation

Back 15

rise in the general level or prices

Front 16

define scarcity

Back 16

limited resources with unlimited wants

Front 17

Type of economic system in which people and firms act in their own best interests to answer the WHAT, HOW, and FOR WHOM, questions

Back 17

market economy

Front 18

Define economic system

Back 18

organized way a society provides for the wants and needs of its people

Front 19

define want

Back 19

way of expressing a need

Front 20

define nondurable good

Back 20

item that lasts for less than three years

Front 21

define voluntary exchange

Back 21

when buyers and sellers freely and willingly enter into transactions

Front 22

the next best alternative use of money, time, or resources when one choice is made rather than another

Back 22

opportunity cost

Front 23

define capital

Back 23

tools, equipment and factories used in the production of goods and services, one of four factors of production

Front 24

define multinational

Back 24

company with manufacturing or service operators in 2 or more countries

Front 25

define corporation

Back 25

form of business organization recognized by law as separate legal entity with all the rights and responsibilities of an individual, including the rights to buy and sell property, enter into legal countries, sue and be sued

Front 26

what is the substitution effect

Back 26

the act of a consumer replacing one item with another less costly item

Front 27

what are the conditions of a healthy market

Back 27

- buyers and sellers are well informed
-adequate

Front 28

what is a market failure?

Back 28

-rising insurance costs due to uninsured motorist
-overcrowded highways

Front 29

costs for electricity, natural gas, and labor are examples of..

Back 29

variable costs

Front 30

market failure can occur when

Back 30

resources do not move from industry to industry

Front 31

variable cost

Back 31

changes costs that occur when output increases or decreases

Front 32

diminishing marginal utility

Back 32

decline in the satisfaction received by using an additional quality of a product

Front 33

production function

Back 33

relationship between changes in output to different amounts of a single input when other inputs do not change

Front 34

monopolistic competition

Back 34

market structure like perfect competition but which allows for product differentiation

Front 35

demand

Back 35

ability and willingness to buy a product as well as desire for it

Front 36

oligopoly

Back 36

market dominated by a few large firms

Front 37

equilibrium price

Back 37

price that leaves neither a surplus nor a shortage

Front 38

income effect

Back 38

change in demand due to a change in price of a product that alters the consumers real income

Front 39

externality

Back 39

effect that an economic activity has on a third party

Front 40

price ceiling

Back 40

highest price that can be legally charged for a product

Front 41

substitution effect

Back 41

demand for 1 product changes because of a change in the price or another product

Front 42

monopoly

Back 42

market has only one seller of a product

Front 43

laissez-faire

Back 43

theory that government should not interfere with business

Front 44

supply elasticity

Back 44

measure of how changes in price affect the supply of a product

Front 45

microeconomics

Back 45

model or economic behavior and decision making by individuals and businesses

Front 46

fixed costs

Back 46

business costs that do not change even if the plant is idle

Front 47

market equilibrium

Back 47

condition characterized by stable prices and product supplied equal quantity demanded

Front 48

marginal utility

Back 48

degree of usefulness received from each additional unit of a product

Front 49

public disclosure

Back 49

requirement that businesses must provide certain information to the public

Front 50

price floor

Back 50

lowest legal price

Front 51

what are the functions of money

Back 51

store of value, measure of value, medium of exchange

Front 52

true or false-
a ''mutual coincidence of wants'' is difficult to achieve in a barter economy.

Back 52

true. (moneyless economy)

Front 53

early colonist in Virginia used tobacco as what form of money?

Back 53

commodity money

Front 54

what is the origin of the American dollar?

Back 54

the spanish peso and the austrian taler

Front 55

what traits should ''money'' have in order to be successful medium of exchange

Back 55

durable, portable, easily divisible

Front 56

what is the current monetary standard under which the United States operates

Back 56

the inconvertible fiat money standard

Front 57

is the federal reserve system controlled by the public or the federal government

Back 57

public

Front 58

what federal agency insure bank deposits in the even of a bank failure?

Back 58

FDIC (Federal Deposit Insurance Corporation)

Front 59

what groups advises the Fed on the growth of the money supply and the level of interest rates?

Back 59

FOMC (Federal Open Market Committee)

Front 60

what are the tools used by the Fed to conduct monetary policy?

Back 60

reserve requirement discount
rate margin requirements
open market operations selective
credit controls

Front 61

property used as security for a loan is

Back 61

collateral

Front 62

a person who leans money to another person is a

Back 62

creditor

Front 63

the owner of shares in a corporations is a

Back 63

stockholder

Front 64

which of the following type of investments carries the highest level of risk?
A. a mattress B. savings account C. checking account
D. certificate of deposit

Back 64

A. a mattress

Front 65

which of the following is NOT important in saving and investing?
a. amount saved b. saving early c. amount of time d. financial institution

Back 65

D. financial institution

Front 66

the price paid to use another's money is called

Back 66

interest

Front 67

a person obligated to pay the debt if another fails to pay is a

Back 67

co-signer