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Junior Year > ECONOMICS FINAL > Flashcards

ECONOMICS FINAL Flashcards

0
Q

What is an economy?

A

an economy is the sum total of all decisions regarding the allocation of resources in a given society

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1
Q

What is Economics?

A

the study of how scarce resources are used to meet supply and demand

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2
Q

What are the four resource types?

A

human, natural, capitalst, entrepreneurship

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3
Q

What is scarcity?

A

limited resources, unlimited wants

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4
Q

What is opportunity cost?

A

the total value of what you give up when you make a choice

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5
Q

What is utility?

A

the pleasure, satisfaction, or benefit a person receives from consuming a product or service or from taking an action

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6
Q

What is an incentive?

A

a thing that motivates or encourages one to do something

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7
Q

What is a disincentive?

A

tends to discourage people from doing something

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8
Q

What is comparative advantage?

A

the condition that exists when someone can produce a good or service at a lower opportunity cost than someone else

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9
Q

What is cost-benefit analysis?

A

estimates and totals up the equivalent money value of the benefits and costs to the community of projects to establish whether they are worthwhile.

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10
Q

What are the different types of economies?

A

traditional, command, pure market, and mixed

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11
Q

What are the characteristics of a traditional economy?

A

an economic system in which decisions about production and consumption are based on custom and tradition

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12
Q

What are the characteristics of a command economy?

A

an economic system in which decisions about production and consumption are made by a powerful ruler or government

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13
Q

What are the characteristics of a market economy?

A

an economic system in which economic decisions are left up to individual producers and consumers

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14
Q

What are the characteristics of a mixed economy?

A

an economic system in which both the government and individuals play important roles in production and consumption. most modern economies are mixed economies

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15
Q

Who was Adam Smith? What was Wealth of Nationns?

A

Scottish economist who wrote the wealth of Nations, pioneering the idea of market economy

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16
Q

What is the unemployment rate?

A

the percentage of the labor force that is seeking work.

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17
Q

What is frictional unemployment?

A

when someone is in-between jobs

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18
Q

What is structural unemployment?

A

advances in technology reduce the demand for certain skills

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19
Q

What is seasonal unemployment?

A

demand for labor depends on the season. businesses shut down for part of the year

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20
Q

What is cyclical unemployment?

A

occurs during periods of decline

21
Q

What is economic growth?

A

a condition in which an economy is expanding and producing more and better goods and services

22
Q

What is the business cycle?

A

a recurring pattern of growth and decline in economic activity overtime

23
Q

What is self interest?

A

acting in a manner in your best interest

24
Q

What is trade?

A

exchange of goods and services

25
Q

What are the goals of any economy?

A

enrichment of everybody, survival, provide structure

26
Q

What do we mean by Demand and Supply?

A

demand is how much consumers are able to purchase. Supply is how much is produced

27
Q

What can cause shifts of the Demand Curve?

A

change in income, change in the number of consumers, change in consumer tastes and preferences, changes in consumer expectation, changes in the price of substitute goods, price of complementary

28
Q

What can cause shifts of the Supply curve?

A

cost of inputs, number of producers, conditions (natural disaster) , technology, expeectations, government

29
Q

What is money?

A

medium of exchange, unit of currency, store of value

30
Q

What is the function of Households in the Circular Flow Model?

A

provide a labor force, purchase goods and services

31
Q

What is the function of businesses in the Circular Flow Model?

A

produce goods and services

32
Q

What are the different market types?

A

monopoly, oligopoly, perfect competition, monopolistic competition

33
Q

What is the role of government in the Circular Flow Model?

A

programs to households, subsidizes businesses

34
Q

What is the role of Financial Markets in the Circular Flow Model?

A

provide loans to businesses

35
Q

What is GDP?

A

sum total of all final goods

36
Q

What is GDP per capita?

A

measure of efficiency

37
Q

What are some short-comings of GDP and GDP per capita as measures?

A

biased because of outliers

38
Q

What is inflation?

A

devaluation of money

39
Q

Describe the US economy

A

high GDP, high inflation

40
Q

What is a public good?

A

available to anyone, nobody can be prevented from using it

41
Q

What are taxes?

A

money paid to the government

42
Q

What are the largest items in the US federal budget?

A

social security, medicare, welfare

43
Q

What is the largest item in state budget?

A

Education

44
Q

What is a deficit?

A

shortfall between revenues and expenditures for any given year

45
Q

What is fiscal policy?

A

taxes and spending

46
Q

Who controls fiscal policy?

A

Congress

47
Q

When is expansionary fiscal policy used?

A

during a recession

48
Q

When is contractionary fiscal policy used?

A

during inflation

49
Q

Who controls monetary policy?

A

The Federal Reserve

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