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50 Cards in this Set

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In The U.S. what do we produce?

Consumer Goods 65%


Capital Goods 10% (Machinery, airplane, etc)


Government Goods 18% (education, services, guns, uniforms)

How do we produce?

Land- rent


Labor- Wages


Capital interest, machinery, tools


Entrepeneurship

For whom do we produce?

functional distribution


wages 65%


rent, interest, and profit 35%

advanced economies

China, Japan, Italy, Germany, France, Canada, S. Korea, and the U.S.

emerging markets

Russia, Hungary, Middle East, Central and South America.

What country has the biggest percent in world production?

The U.S. with 21%

percent of the global oil Energy produced in the Middle East

56%

federal government major expeditures

Social Security 19.3%


Medicare/ Medicaid 21%


National Defence and Homeland Security 19.2%


Interest National Debt 7-9%

Where does the government get money from?

Taxes


Personal Income taxes 45%


Corporate income 12%


Social Security taxes (FICA) 36%

State and and local Government major expeditures

Education 34%


Welfare 18%


Highways

U.S. major trading partners

Canada 14%


Mexico 11%


China 11%


Japan 6%

Trade deficit

China (-$280 billion)


Mexico (-$57 b)


Germany (-$55 b)


Japan (-$47b)

Differences in human capital

poor countries invest less in education than rich countries

Differences in physical capital

less infrastructure equipment machinery, in poor countries

Quality Demand

the amount of good that buyers are willing and able to purchase

Law of demand

the quantity demanded of a good falls when the price of good rises

Normal good

increase in income that leads to an increase in demand

inferior good

and increase in income that decreases good demand

moves the demand curve

change in income


consumer taste


Substitute/ complements


number of buyers


future expectations


it has to do with you

moves the supply curve

technology


cost of production


number of sellers


future expectations


it has to do with a company

supply goes up

price goes down

Scarcity

the condition that arises because wants exceed ability to satisfy your need

Scarce goods

economic goods and are related to the price: the higher the price the more scarce and vice versa

Free good

a good at zero price that you don't want

Examples of economics goods

food, clothing, education, space explorations

Command economy

GOVERNMENT owns means of production example: N. Korea have a few choices, and government controls everything

market economy

Free enterprise, choices, self interest, property rights

physical capital

car, and machines

Human Capital

investment in education

Oppurtunity Cost

The value of the best alternative foregone when the activity is chosen: refers to the sacrifice of single gest alternative for example going to college and wait longer to receive higher but much better income

Direct cost

Tuition, books, food

indirect Cost

University building, professor wages

Benefits

Monetary, Knowledge, Status, Prestige

Sunk Cost

Cost that is incurred no matter what; a cost that is irrelevant when you make a choice

comparative advantage

A country will produce a good at the lowest opportunity cost

Absolute Advantage

a country will produce the cheapest product

specialisation of labor

allows worker to develop five fundamental questions:


what goods will be produced?


how will the goods will be produced?


How will get the goods?


how will the system promote the progress?


how will the system accommodate the changes

land

payment is the rent

labor

workers get paid wages

capital

machinery, equipment payment is interest

Entrepeneur

businessmen, manager is paid with profit

entrepreneurship

human resource that organizes labor, land and capital to produce goods an services

production possibilities curve

a curve showing all alternative combinations of goods can be produced

Technology

Shift production possibilities outward or inward

Utility

benefit or satisfaction you get form choosing among scarce goods

Law of marginal utility

extra benefit or satisfaction you get form consuming one more additional unit

Microeconomics

Economics of the firm- economic decisions of a household, firm, or industry

Macroeconomics

study of U.S. economy as a whole; national and international problems

Positive economics

analysis of economic problem in terms of facts and data WHAT IS IN THE ECONOMIC RELATIONSHIP?

normative Economics

analysis of economic problems in term of value judgements politicians use this