Economics Semester 1 Review Westfield

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labor union

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organization that works for its members interests concerning pay, working hours, healthcare, benefits and other job related matters.

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craft union

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labor union whose workers perform the same kind of work; same as a trade union

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industrial union

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labor union whose workers perform different kinds of work

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closed shop

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illeagal arrengement under which workers must join a union before they are hired.

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agency shop

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arrengement under which non inion members must pay union dues.

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collective bargaining

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process of negotiation between union and management representatives over pay, benefits, and job related matters.

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division of labor

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division of work into a number of seperate tasks to be performed by different workers; same as specialization.

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minimum wage `

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lowest legal wage that can be paid to most workers.

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price floor

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lowest legal price that can be charged for a product

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price ceiling

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maximum legal price that can be charged for a product.

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GDP

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dollar value of all final good service and structures produced within a country's borders during a one year period.

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Inflation

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rise in the general level of prices.

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opportunity cost

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

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price

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monetary value of a product as established by supply and demand

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macroeconomics

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that part of economic theory dealing with the economy as a whole and decision making by large units such as government and unions.

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federal reserve system

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privately owned , publicaly controlled , central bank of the united states.

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microeconomics

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branch of economic theory that deals with behavior and decision making by small units such as individual firms.

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economic system

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

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traditional economy

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economic system in which the allocation of scarce resources and other economic activity is the result of ritual habit or custom.

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command economy

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economic system characterized by a central authority that makes most of the major economic decisions.

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GDP

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dollar value of all final good service and structures produced within a country's borders during a one year period.

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Inflation

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rise in the general level of prices.

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opportunity cost

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

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price

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monetary value of a product as established by supply and demand

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macroeconomics

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that part of economic theory dealing with the economy as a whole and decision making by large units such as government and unions.

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federal reserve system

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privately owned , publicaly controlled , central bank of the united states.

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microeconomics

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branch of economic theory that deals with behavior and decision making by small units such as individual firms.

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economic system

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

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traditional economy

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economic system in which the allocation of scarce resources and other economic activity is the result of ritual habit or custom.

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command economy

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economic system characterized by a central authority that makes most of the major economic decisions.

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market economy

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economic system in which supply and demand and the price system help people make decisions and allocate resources , same as free enterprise economy

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socialism

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economic system in which government owns some factors of production and has a role in determining what and how goods are produced.

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demand

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combination of desire, ability and willingness to buy a product.

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demand curve

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a graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time.

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demand elasticity

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the extent to which a change in price causes change in the quantity demanded.

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supply

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the amount of a product that would be offered for sale at all possible prices that could prevail in the market.

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supply curve

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a graph showing the various quantities supplied at each and every price that might prevail in the market.

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economic growth

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sustained period during which a national total output of goods and services increases.

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functions of money

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medium of exchange, measure of value, store of value,(commodity money may have use as another good) (fiat money is money by gov decree)

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characteristics of money

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portable, durable, divisable and in limited supply.

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public good

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an economic product that is consumed collectively; highways and national defense police and fire protection.

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monopoly

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market structure chracterized by a single producer ; a characteristic of imperfect competition.

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geographic monopoly

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a market situation where a firm has a monopoly because of its location or the small size of the market.

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natural monopoly

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a market where average costs are lowest when all output is produced by a single firm

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technological monopoly

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market situation where a firm has a monopoly because it owns or controls a manufacturing method process or other scientific advance.

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government monopoly

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monopoly created and or owned by the government.

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entrepreneur

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risk taking individual in search of profits, one of four factors of production.

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human capital

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sum of peoples skills abilities, health and motivation .

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structural unemployment

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unemployment caused by a fundamental change in the economy that reduces the demand for some workers.

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corporations

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

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perfect competition

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market structure characterized by a large number of well informed independent buyers and sellers who exchange identical products.

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oligopoly

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market structures in which a few large sellers dominate and have the ability to affect prices in the industry, form of imperfect competition.

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monopolistic competition

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market structure having all conditions of pure competition except for identical products , it is a form of imperfect competition.

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voluntary exchange

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act of buyers and sellers freely and willingly engaging in market transactions, characteristic of capitalism and free enterprise.

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mixed economy or modified private enterprise economy

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people carry on their economic affairs freely but are subject to some government intervention and regulation.

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sole propprietorship

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a business owned and run by one person.

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partnership

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is a business jointly owned by two or more persons.

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corporation

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a form of business organization recognized by law as a separate legal entity having all the rights of an individual.

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limited partnership

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limited partners have limited liability, the investors have liability also.

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charter

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a government document that gives permission to create a corporation.

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common stock

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represents basic owndership of the corpoartion , one vote per share.

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horizontal merger

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combination of two or more firms producing the same kind of product.

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conglomerate

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a firm with four or more businesses making unrelated products , with no single business responsible for the majority of its sales.

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multinational

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corporation producing and selling without regard to national boundaries and whose business activities are located in several different countries.

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non profit organization

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economics instituion that operates like a business but does not seek financial gain.

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production possibilities frontier

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diagram representing miximum combinations of goods and services an economy can produce when all productive resources are fully employed.

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scarcity

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fundamental economic problem facing all societies that results from a combination of scarce resources and peoples virtually unlimited wants.

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factors of production

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productive resources that make up the four categories of LAND CAPITAL LABOR and ENTREPENEURSHIP

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marginal utility

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satisfaction or usefullnessobtained from acquiring one more unit of a product.