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Consumer Ed Honors > Economics > Flashcards

Economics Flashcards

1
Q

Supply

A

The amount of a good or service a firm wants to sell, and is able to sell per unit time.
-Ability/willingness of the seller to make the stuff available for sale

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2
Q

Demand

A

The amount of a good or service a consumer wants to buy, and is able to buy per unit time

  • Ability/willingness of the consumer to buy something
  • As price increases, quantity demand increases
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3
Q

Supply curve

A
  • Shows the The quantity supplied a each price, holding constant all other determinants of supply
  • Dependent variable is the quantity supply
  • Independent variable is the good’s price per unit
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4
Q

Demand curve

A

-Shows the demand of each price, holding constant all other determinants of demand
The DEPENDENT variable is the quantity demanded
• The INDEPENDENT variable is the good’s price per unit

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5
Q

Positive change in supply: what does it look like and why is it caused

A
  • Shift to the right
  • Weather
  • Prices of factors of production
  • Changes in production efficiency
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6
Q

Negative change in supply: what does it look like and why is it caused

A
  • Shift to the left
  • Weather
  • Prices of factors of production
  • Changes in production efficency
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7
Q

Positive change in demand: what does it look like and why is it caused

A
  • Consumer income increases (shift to the right)
  • Consumer tastes
  • Availability of substitutes (decreases)
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8
Q

Negative change in demand: what does it look like and why is it caused

A
  • Consumer income decreases (down)
  • Consumer tastes
  • Availability of substitutes (increases)
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9
Q

Changes in consumer income

A

Normal good and inferior good

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10
Q

Normal good vs inferior good

A

Normal
-When an increase in income causes and increase in demand. EX: organic food, coffee

Inferior
-When an increase in income causes a decrease in demand
EX: Maruchan, potatoes

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11
Q

What is a substitute and what makes two things substitutes

A

-Alternatives
-An increase in the price of one of them causes an increase in demand for the other
EX: An increase in the price of Nike Shoes would increase the demand for Adidas Shoes (assuming
they are substitutes)

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12
Q

What makes two things compliments

A

-An increase in the price of one of them causes a decrease in the demand for the other
EX: Thus, an increase in the price of bread would decrease the demand for eating peanut butter
(assuming they are compliments)

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13
Q

Equilibrium pt

A

Where supply and demand are equal

-AKA market price

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14
Q

Needs vs wants

A

Needs: basic to survival

Wants: Add to the quality of life

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15
Q

Goods

A

Things you can see and touch.

-Tangible products

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16
Q

Services

A

Wants satisfied through the efforts of other people or through the use of equipment.

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17
Q

Types of resources

A
  • Natural
  • Human (labor)
  • Capital
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18
Q

Natural resources

A

All of the materials that come from earth, the water, or the air.

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19
Q

Human resources

A
  • AKA labor

- The people who work to produce goods and services

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20
Q

Capital resources

A

The tools, equipment, and buildings that are needed to

produce goods and service. This includes the money needed to run firms.

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21
Q

Scarcity

A
  • Situation in which consumer wants are greater than the resources available
  • Lack of resources
  • Consumer wants are greater than supply
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22
Q

Key economic questions

A

-WHAT to goods and services are to be produced
HOW should the goods and services be produced
-What needs and wants will be satisfied with goods and services being produced
(FOR WHOM?)

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23
Q

Surplus

A

Excess goods and services that cannot be sold because the price was too high

  • More than enough product to meet the demand
  • Top triangle
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24
Q

Shortage

A

Not enough goods and services available to meet demand because consumers are willing to pay more than current price.

  • Not enough product to meed the demand
  • Bottom triangle
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25
Q

Importing

A

Buying things from other countries

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26
Q

Exporting

A

Selling things to other countries

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27
Q

Trade surplus

A

When the exports are greater than the imports

-More money coming in than your are spending

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28
Q

Trade deficit

A

When imports are greater than exports

-Buy more than we sell, deficit of money

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29
Q

Absolute advantage

A

Exists when a country can produce a good or service at lower cost than other countries

  • South American countries: coffee
  • Saudi Arabi: oil
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30
Q

Comparative advantage

A

A situation in which a country specializes in the production of a good or service at which it is relatively more efficient
Ex: of the market is better for computers over clothing, the country will produce computers

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31
Q

What discourages international trade and why do countries use them

A

-Tariffs
-Quotas
-Embargos
Countries can use these barriers to encourage domestic purchasing or to show disapproval of a countries policies

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32
Q

What encourages international trade

A

Free trade zones

Free trade agreements

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33
Q

Tariffs

A

A tax that a government places on certain imported products

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34
Q

Quotas

A

Setting a limit on the quantity of a product that can be imported or exported within a given period to regulate international trade

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35
Q

Embargos

A

Stopping the export and import of a products

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36
Q

Free trade zones

A

A selected area where products can be imported duty-free and the.
Stored, assembled, and or used in manufacturing
-the duty free products usually around an airport or seaport

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37
Q

Free trade agreements

A

Member countries agree to remove duties and trade barriers on products traded among them
Ex: NAFTA (North American Free Trade Agreement)

38
Q

Multinational corporations

A

An organization that does business in several countries

Usually consist of a parent company in a host country and the same separate companies in one or more foreign countries

39
Q

Economic systems

A
  • Market
  • Command
  • Traditional
  • Mixed
40
Q

Traditional economy

A

Goods and services are produced the way it always has been done
-Traditions dictate how the economic questions are answered

41
Q

Market economy

A

Resources are owned and controlled by the people of the country

  • Individuals buying and selling goods and services in the market place answers the three economic questions
  • Limited government involvement
  • Profit motive and marketing
42
Q

Command economy

A

Resources are owned and controlled by the government

  • The government decides how the economic questions are answered
  • little economic freedom
  • no competition, no 1% issues, no innovations, no profit motive
43
Q

Mixed economy

A
  • There is a combination of command & market economies

* Many command economies are transitioning over to mixed

44
Q

Inflation

A

-Increases in the price of products and services over a measurable period of time

Inflation Increases = Purchasing Power Decreases

45
Q

Causes of inflation

A
  • Increased demand
  • Increased costs
  • Oversupply of money
46
Q

Exchange rate

A

Value of one currency expressed in terms of the another currency

47
Q

Monetary policy

A

Adjusting interest rates and the supply of money

-inflation rates

48
Q

Fiscal policy

A

Policies regarding spending and taxation

-Determining how to use government money to influence the economy

49
Q

Depression

A

Severe and prolonged downturn in economic activity
-increased unemployment
-Volatility in currency value fluctuations
-

50
Q

Recession

A

Shorter term, often a few months/quarters of declined economic activity (GDP)

51
Q

SEC

A
  • Security and exchange commission
  • Federal agency that monitors the stock market
  • Protect investors
  • Maintain fair, orderly, and efficient markets
  • Facilitate capital formation
52
Q

CPSA

A

Consumer Product Safety Act (CPSA)

  • Has authority to ban and recall products
  • Develops safety standards
53
Q

FCC

A

Federal Communications Commission

  • Regulates interstate communications by radio, television, wire, satellite, and cable
  • If a radio tv station airs offensive language or graphics, a fine would be given by the FCC
54
Q

FTC

A

Federal Trade Commission

  • Promotes consumer protection
  • Elimination and prevention of anti-competitive policies like a monopoly
  • Fed agency that regulates fair competition
55
Q

FDIC

A

Federal Deposit Insurance Corporation

  • Get your money back after a bank failure
  • Provide stability to economy and failing business
  • Insures about 250,000 per depositor
56
Q

EPA

A

Environmental Protection Agency

-Protects human and environmental health

57
Q

BBB

A

Better Business Bureau

  • Private organization that gathers information on local businesses
  • Gives businesses and charities or whatever rankings
58
Q

Deceptive advertising

A

False advertisings. The use of false, misleading, or unproven information to advertise products to consumers.

59
Q

Comparative advertising

A

*Advertisers that relates its products qualities to those if a competing product
EX: comparing Kirkland and the OG brand

60
Q

Persuasive advertising

A
  • Ethos, Pathos, Logos

- Advertising that is design to appeal to emotions and get you to buy something:

61
Q

Informative advertising

A
  • Educates the public on the features
  • Is carried out in an informative manner. The idea is to give the ad the look of an official article to give it more credibility
62
Q

Buyer’s remorse

A

Sense of regret after having made a purchase. Associated frequently with the purchase of an expensive item

63
Q

Impulse purchase

A

• Unplanned discussion to buy a product or service made just before the purchase. Emotions and feelings play a decisive role bc of exposure or smth

64
Q

Advertising that is design to appeal to emotions and get you to buy something:

A

Persuasive advertising

65
Q

Advertisers that relates its products qualities to those if a competing product:

A

Comparative advertising

66
Q

Feeling of regret after making a purchase:

A

Buyers remorse

67
Q

Comparative advantage

A

A situation in which a country specializes in the production of a good or service at which it is relatively more efficent

68
Q

Prosperity

A

The highest point in business cycle

69
Q

Exchange rate

A

The price of currency in terms of another currency: e

70
Q

3 Factors of production

A

Land, labor, capital

71
Q

When a country imports more than it exports

A

Trade deficit

72
Q

If prices continue to increase, the quantity supplied of the product will_____:

A

Increase

73
Q

Quantity supplied

A

How much a firm is willing, able and wanting to make

74
Q

If a radio tv station aids offensive language or graphics a fine would be levied by this organization

A

FCC. Federal Communications Commission

75
Q

Decision made on a whim:

A

Impulse purchase

76
Q

As prices rise, quantity demanded will____:

A

Increase

77
Q

Federal agency monitors the stock market:

A

SEC

78
Q

When supplied outnumbers quantity demanded

A

Surplus

79
Q

U.S example of this type of economy. Businesses can make most of their decisions, but government has some control:

A

Mixed economy

80
Q

An economy that the government tells you what to produce

A

Command economy

81
Q

Pt where quantity supplied equals the quantity demanded

A

Equilibrium point

82
Q

NAFTA was the trade agreement among which three countries

A

America, Canada, Mexico

83
Q

Consumers wants are greater than the the resources available:

A

Scarcity

84
Q

opportunity cost

A

Value of the best alternative when making a descision

85
Q

Increase in prices that reduces the purchasing power of money

A

Inflation

86
Q

Fed agency that regulates fair competition:

A

FTC

87
Q

Tax paid on imported good

A

Tariffs

88
Q

Things you can’t live without

A

Needs

89
Q

Two results of competition

A

Lower prices, higher product quality

90
Q

Private organization that gathers information on local businesses

A

BBB

91
Q

Products sold to other countries

A

Exports

92
Q

Products bought from other countries

A

Imports

Consumer Ed Honors (5 decks)

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