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Economics Flashcards

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AP® Biology flashcards Biology 101 flashcards
1
Q

the study of how people use limited resources to meet unlimited wants

A

Economics

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2
Q

limited quantities of resources to meet unlimited wants

A

Scarcity

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3
Q

Factors of production

A

land, labor, and capital; the three groups of resources that are used to make all goods and services

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4
Q

all human-made goods that are used to produce other goods and services, tools, and buildings

A

Physical capital

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5
Q

the skills and knowledge gained by a worker through education and experience

A

Human capital

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6
Q

the most desirable alternative given up as the result of a decision

A

Opportunity cost

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7
Q

an alternative that we sacrifice when we make a decision

A

Trade-offs

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8
Q

deciding whether to do or use one additional unit of some resource

A

Thinking at the margin

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9
Q

a line connecting data points on a graph that shows the combinations of the production of products

A

Production possibilities frontier

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10
Q

using resources in such a way as to maximize the production of goods and services

A

Efficiency

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11
Q

a phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods

A

Guns or butter

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12
Q

the method used by a society to produce and distribute goods and services

A

Economic system

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13
Q

the income people receive for supplying factors of production, such as land, labor, or capital

A

Factor payments

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14
Q

Economic goals

A

economic efficiency, growth, freedom, security, and equity

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15
Q

government programs that protect people experiencing unfavorable economic conditions

A

Safety net

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16
Q

economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services

A

Traditional economy

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17
Q

economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets

A

Market economy

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18
Q

economic system in which the central government makes all decisions on the production and consumption of goods and services

A

Centrally planned economy

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19
Q

market-based economic system with limited government involvement

A

Mixed economy

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20
Q

the concentration of the productive efforts of individuals and firms on a limited number of activities

A

Specialization

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21
Q

shows interactions of households and firms in the free market

A

Circular flow of market economy

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22
Q

self interest and competition work together to create a self-regulating market

A

Self-regulation of market economy

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23
Q

term economists use to describe the self-regulating nature of the marketplace

A

Invisible hand

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24
Q

a political system characterized by a centrally planned economy with all economic and political power resting in the hands of the central government

A

Communism

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25
Q

an economic system characterized by private or corporate ownership of capital goods; investments that are determined by private decision rather than by state control; and determined in a free market

A

Free enterprise

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26
Q

the concerns of the public as a whole

A

Public interest

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27
Q

protects private ownership and encourages entrepreneurship to stimulate efficiency

A

Purpose of free enterprise

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28
Q

laws requiring companies to provide full information about their products

A

Public disclosure laws

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29
Q

enforced laws by the federal trade commission

A

Consumer protection laws

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30
Q

an income level below that which is needed to support families or households

A

Poverty threshold

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31
Q

government aid to the poor

A

Welfare

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32
Q

provides direct cash transfers of retirement income to the nation’s elderly

A

Social security

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33
Q

provides money to eligible workers who have lost their jobs

A

Unemployment insurance

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34
Q

form of insurance providing wage replacement for workers injured on the job

A

Workers compensation

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35
Q

a shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers

A

Public good

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36
Q

someone who would not choose to pay for a certain good or service, but who would get the benefits of it anyway if it were provided as a public good

A

Free rider

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37
Q

paid work, trade or profession

A

Employment

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38
Q

increasing in size

A

Growth

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39
Q

the state of being stable

A

Stabilility

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40
Q

consumers buy more of a good when its price decreases and less when its price increases

A

Law of demand

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41
Q

when consumers react to an increase in a good’s price by consuming less of that good and more of other goods

A

Substitution effect

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42
Q

the change in consumption resulting from a change in real income

A

Income effect

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43
Q

a graphic representation of a demand schedule

A

Demand curve

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44
Q

a Latin phrase that means “all other things held constant”

A

Ceteris paribus

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45
Q

a good that consumers demand more of when their income increases

A

Normal good

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46
Q

a good that consumers demand less of when their incomes increase

A

Inferior good

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47
Q

Factors that shift demand

A

income, related goods price, expectations of future prices, number of buyers, tastes

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48
Q

two goods that are bought together

A

Complements

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49
Q

foods used in place of one another

A

Substitutes

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50
Q

a measure of how consumers react to a change in price

A

Elasticity of demand

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51
Q

Elasticity of demand calculation

A

the percentage change in demand of a good divided by the percentage change in the price of the good

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52
Q

Determinants of elasticity

A

availability of substitutes, importance, need vs. want

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53
Q

tendency of suppliers to offer more of a good at a higher price

A

Law of supply

54
Q

a measure of the way quantity supplied reacts to a change in price

A

Elasticity of supply

55
Q

a graph of the quantity supplied of a good at different prices

A

Supply curve

56
Q

describes when suppliers have altered production output

A

Shifts in supply

57
Q

Factors that shift supply

A

technology, taxes, subsidies, regulations

58
Q

a cost that does not change, no matter how much of a good is produced

A

Fixed costs

59
Q

a cost that rises or falls depending on how much is produced

A

Variable costs

60
Q

the cost of producing one more unit of a good

A

Marginal costs

61
Q

Governments influence on supply

A

the government can place taxes, subsidies, and regulations

62
Q

a government payment that supports a business or market

A

Subsidies

63
Q

a required payment to a local state, or national government

A

Taxes

64
Q

government intervention in a market that affects the production of a good

A

Regulations

65
Q

a tax on the production or sale of a good

A

Excise taxes

66
Q

the additional income from selling one more unit of a good; sometimes equal to price

A

Marginal revenue

67
Q

the point at which quantity demanded and quantity supplied are equal

A

Equilibrium

68
Q

describes any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market

A

Disequilibrium

69
Q

when quantity demanded is more than the required amounts

A

Excess demand

70
Q

when quantity supplied is more than quantity demanded

A

Excess supply

71
Q

a maximum price that can be legally charged for a good or service

A

Price ceiling

72
Q

a price ceiling placed on rent

A

Rent control

73
Q

a minimum price that can be legally charged for a good or service

A

Price floor

74
Q

a minimum price that an employer can pay a worker for an hour of labor

A

Minimum wage

75
Q

Problems with ceilings

A

ceilings cause shortages

76
Q

Problems with floors

A

floors cause surpluses

77
Q

increase in supply and constant demand will result in decreased equilibrium quantity

A

Shifts in supply, demand, equilibrium

78
Q

a situation in which a good or service is unavailable, or a situation in which the quantity demanded is greater than the quantity supplied, also known as excess demand

A

Shortage

79
Q

the financial and opportunity costs consumers pay when searching for a good or service

A

Search costs

80
Q

the market gives producers an incentive to produce goods that consumers want

A

Advantages of prices

81
Q

an expectation that encourages people to behave in a certain way

A

Incentives

82
Q

costs of production that affect people who have no control over how much of a good is produced

A

Spillover costs

83
Q

constantly subjected to both factors resulting in supply shifts and factors resulting in demand shifts

A

Shifts in equilibrium

84
Q

the market in which households purchase the goods and services that firms produce

A

Product markets

85
Q

a market that has a broad range of competitors who are selling the same product

A

Pure competition

86
Q

a market structure in which many companies sell products that are similar but not identical

A

Monopolistic competition

87
Q

a market structure in which a few large firms dominate a market

A

Oligopoly

88
Q

a market dominated by a single seller

A

Monopoly

89
Q

the governments regulate markets to protect the interests of consumers

A

Monopoly regulation

90
Q

in theories, these are barriers that make it hard to enter a certain market

A

Barriers to entry

91
Q

a market that runs most efficiently when one large firm supplies all of the output

A

Natural monopolies

92
Q

the cost advantages that enterprises obtain due to size, output, or scale of operation with cost per unit of output generally decreasing with increasing scales as fixed costs are spread out over more units of output

A

Economies of scale

93
Q

the process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors’ products as well as a firm’s own products

A

Product differentiation

94
Q

the act of redirecting resources from being consumed today so that they may create benefits in the future; the use of assets to earn income or profit

A

Investment

95
Q

the system that allows the transfer of money between savers and borrowers

A

Financial system

96
Q

claim on the property or income of a borrower

A

Financial assets

97
Q

a person who acts as a link between people in order to try to bring an agreement

A

Intermediaries

98
Q

fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets

A

Mutual funds

99
Q

spreading out investments to reduce risk

A

Diversification

100
Q

a collection of financial assets

A

Portfolio

101
Q

a formal contract to repay borrowed money with interest at fixed intervals

A

Bonds

102
Q

the interest rate that a bond issuer will pay to a bondholder

A

Coupon rate

103
Q

the amount that an investor pays to purchase a bond that will be repaid to investor at maturity

A

Par value

104
Q

the annual rate of return on a bond if the bond were held to maturity

A

Yield

105
Q

are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘C’

A

Bond ratings

106
Q

Types of bonds

A

corporate, treasury, municipal, mortgage, investment, junk

107
Q

a certificate of ownership in a corporation

A

Stocks

108
Q

the portion of corporate profits paid out to stockholders

A

Dividend

109
Q

getting more back than what you paid for it

A

Capital gain

110
Q

getting back less than what you paid for

A

Capital loss

111
Q

index that shows how stocks of 30 companies in various industries have changed in value

A

Dow Jones Industrial Average

112
Q

a steady rise in the stock market over a period of time

A

Bull market

113
Q

a steady drop in the stock market over a period of time

A

Bear market

114
Q

Crash of 1929 (causes)

A
  • borrowing money (credit)
  • over-speculation (high-risk investments with borrowed money in hoped of getting a big return)
  • lack of regulation
115
Q

an individual retirement account allowing a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free

A

Roth IRA

116
Q

real GDP divided by the total population

A

GDP per capita

117
Q

calculates GDP by adding up all the incomes in the economy

A

Income approach

118
Q

totals annual expenditures on four categories of final goods and services (consumer, business or investment, government, net exports or imports)

A

Expenditure approach

119
Q

a period of macroeconomic expansion followed by a period of contraction

A

Business cycle

120
Q

Business cycle phases

A
  • Expansion (a period of economic growth as measured by a rise in real GDP)
  • Peak (the height of an economic expansion, when real GDP stops rising)
  • Contraction (a period of economic decline marked by falling real GDP)
  • Trough (the lowest point in an economic contraction, when real GDP stops falling)
121
Q

the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding

A

Interest rates

122
Q

a tax in which the percentage of income paid in taxes increases as income increases

A

Progressive tax

123
Q

a tax for which the percentage of income paid in taxes remains the same for all income levels

A

Proportional tax

124
Q

a tax for which the percentage of income paid in taxes decreases as income increases

A

Regressive tax

125
Q

Federal expenditures (Top 3)

A
  1. mandatory spending
  2. interest on federal debt
  3. discretionary spending
126
Q

taxes that fund Social Security and Medicare

A

FICA

127
Q

the analysis of the effect of a particular tax on the distribution of economic welfare

A

Tax incidence

128
Q

any commodity which is produced and subsequently consumed by the consumer, to satisfy its current wants or needs

A

Final goods

129
Q

goods used in the production on final goods

A

Intermediate goods

130
Q

GDP expressed in constant, or unchanging, prices

A

Real GDP

131
Q

GDP measured in current prices

A

Nominal GDP

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