Econ Semester Review

Question 1

a situation that exists when there are not enough resources to meet human wants

Answer 1

scarcity

Question 2

the value of something that is given up by choosing one alternative over another

Answer 2

opportunity cost

Question 3

the economic resources needed to produce goods and services

land, labor, capital, entrepreneurship

Answer 3

factors of production

Question 4

the condition in which economic resources are used to produce the maximum amount of goods/services

Answer 4

efficiency

Question 5

combination of vision, skill, ingenuity, and willingness to take risks needed to create/run new businesses

Answer 5

entrepreneurship

Question 6

the benefit/satisfaction gained from using one or more unit(s) of a good or service

Answer 6

marginal benefit

Question 7

the additional cost of producing or using on more unit of a good or service

Answer 7

marginal cost

Question 8

wrote “The Communist Manifesto”

socialism economic theory

Answer 8

Karl Marx

Question 9

the change from private ownership to government or public ownership (government takes over all businesses)

Answer 9

nationalizing

Question 10

based on individual choice and voluntary exchange

Answer 10

market system

Question 11

government makes all economic decisions

Answer 11

command system

Question 12

money distributed to taxpayers who do not provide goods or services in return

Answer 12

transfer payments

Question 13

government economic/social programs that provide assistance to the needy

Answer 13

welfare

Question 14

goods and services provided by the government and consumed by the public as a group

Answer 14

public goods

Question 15

visualization of all interactions in a market economy

Answer 15

circular flow model

Question 16

change in price = larger change in quantity demanded or supplied

Answer 16

elasticity

Question 17

quantity demanded/supplied changes little as price changes

Answer 17

inelastic

Question 18

willingness and ability of a producer to produce and sell a product

Answer 18

supply

Question 19

desire to have some good or service and the ability to pay for it

Answer 19

demand

Question 20

graph that shows data from a supply schedule

Answer 20

supply curve

Question 21

graph that shows a demand schedule, or how much of a good or service an individual is willing and able to purchase at each price

Answer 21

demand curve

Question 22

states that when the price of a good or service goes down, quantity demanded increases, and vise versa

Answer 22

law of demand

Question 23

producers are willing to sell more of a good or service at a higher price than they are at a lower prices

Answer 23

law of supply

Question 24

an established minimum price that buyers must pay for a product

Answer 24

price floor

Question 25

an established maximum prices that sellers may charge for a product

Answer 25

price ceiling

Question 26

expenses that business owners incur no matter how much they produce

Answer 26

fixed costs

Question 27

business costs that vary with the level of production output

Answer 27

variable costs

Question 28

products used together so the increase or decrease in demand for one will result in an increase or decrease in demand for the other

Answer 28

complementary goods

Question 29

the money made from each additional unit sold

Answer 29

marginal revenue

Question 30

the amount of goods or services a person can produce in a given time

Answer 30

labor productivity

Question 31

a situation in which supply is greater than demand (usually the result of prices set too high)

Answer 31

surplus

Question 32

a situation in which demand is greater than supply (usually the result of prices set too low)

Answer 32

shortage

Question 33

price at which quantity demanded equals quantity supplied

Answer 33

equilibrium

Question 34

ideal model of a market economy - none of the many well-informed/independent buyers or sellers has control or price over a standardized good/service

Answer 34

perfect competition

Question 35

market structure in which only a few sellers offer a similar product

Answer 35

oligopoly

Question 36

market structure in which many sellers offer similar but not standardized products to consumers

Answer 36

monopolistic competition

Question 37

market structure in which only one seller sells a product for there are no close substitutes

Answer 37

monopoly

Question 38

the practice of contracting with an outside company, often in a foreign country, to provide goods or services

Answer 38

outsourcing

Question 39

the process of negotiation between a business and its organized employees to establish wages and improve working conditions

Answer 39

collective bargaining

Question 40

the gross domestic product corrected for changes in prices from year to year

Answer 40

real GDP

Question 41

the gross domestic product states in terms for the current value of goods and services

Answer 41

nominal GDP

Question 42

an increase in economic activity

Answer 42

expansion

Question 43

a decrease in economic activity

Answer 43

contraction

Question 44

jobless labor forces that are actively looking for work

Answer 44

unemployment

Question 45

when a person's income and resources do not allow them to achieve a minimum standard of living

Answer 45

poverty

Question 46

a sustained rise in the general price level, or a sustained fall in the purchasing power of money

Answer 46

inflation

Question 47

the federal government's use of taxing and spending to affect the economy

Answer 47

fiscal policy

Question 48

the Federal Reserve's actions that change the money supply to influence the economy

Answer 48

monetary policy

Question 49

a plan to stimulate aggregate demand

Answer 49

demand-side policy

Question 50

a plan designed to provide incentives to producers to increase aggregate supply

Answer 50

supple-side policy

Question 51

the government practice of spending more than it collects in revenue for a specific fiscal year

Answer 51

deficit

Question 52

the central bank of the United States

Answer 52

the Fed

Question 53

the board of 7 appointed members that supervises the operations of the Federal Reserve System and sets monetary policy

Answer 53

Board of Governors

Question 54

the series of growing and shrinking periods of economic activity, measured by increases or decreases in real GDP

Answer 54

business cycle

Question 55

countries gain when they produce items they are most efficient at producing at the lowest opportunity cost

Answer 55

law of comparative advantage

Question 56

the ability of one trading nation to make a product more efficiently than another trading nation

Answer 56

absolute advantage

Question 57

a limit on the amount o product that can be imported

Answer 57

quota

Question 58

a fee charged for goods brought into a country from another country

Answer 58

tariff

Question 59

a nation's GDP divided by total population

Answer 59

per capita

Question 60

an economic system based on private ownership of the factors of production

Answer 60

capitalism

Question 61

an economic system in which there is no private ownership of property and little or no political freedom

Answer 61

communism

Question 62

the financial gain a seller makes from a business transaction

Answer 62

profit

Question 63

a long-term bond that matures in 30 years

Answer 63

treasury bonds

Question 64

a short-term bond that matures in less than one year

Answer 64

treasury bills