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Economics > Economics FINAL :c > Flashcards

Economics FINAL :c Flashcards

1
Q

economics

A

The scientific study of the allocation of scarce resources in order to fulfill society’s wants and needs

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2
Q

scarcity

A

Limited quantities of resources to meet unlimited wants

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3
Q

efficiency

A

the point at which the quantity demanded and the quantity supplied are equal

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4
Q

demand

A

The quantity of a good or service that people are willing and able to purchase at a given price

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5
Q

law of demand

A

As price rise, demand will decrease (Indirect relationship)

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6
Q

supply

A

What producers are willing to produce at a certain price

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7
Q

law of supply

A

As price goes up. supply does up (direct relationship)

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8
Q

surplus

A

Any situation where quantity supplied exceeds the quantity demanded

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9
Q

shortage

A

Any situation where quantity demanded exceeds the amount in supply

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10
Q

factors of production

A

Land, labor, capital, and entrepreneurs

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11
Q

“guns or butter”

A

Economists call the trade-off countries have to make between choosing to produce military or consumer goods.

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12
Q

opportunity cost

A

value of the best alternative given up when a choice is made

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13
Q

incentive

A

motivation to make a certain choice

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14
Q

market

A

where goods are bought and exchanged

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15
Q

entrepreneur

A

a person willing to take a financial risk by combining resources to produce a good or service

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16
Q

laissez faire

A

“hands off” no government regulation in business

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17
Q

production possibilities curve

A

the combination of goods that can be produced with a set of resources

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18
Q

equilibrium

A

Point at which quantity demanded and quantity supplied are equal

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19
Q

gross domestic product (GDP)

A

Useful in determining economic growth. Real GDP is used to measure economic growth

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20
Q

stock

A

represents ownership of a company. It is a way for corporations to raise money.

21
Q

profit

A

provides incentive for entrepreneur to take risks, money made

22
Q

subsidy

A

a government payment to support a business or market

23
Q

IPO

A

Initial Public Offering, when a company “goes public”

24
Q

What are the three basic economics questions?

A

how to produce, what to produce, for whom to produce

25
Q

Define and explain the advantages and disadvantages of the following forms of business organization: sole proprietorship

A

Takes on the most liability

26
Q

Define and explain the advantages and disadvantages of the following forms of business organization: sole proprietorship
Define and explain the advantages and disadvantages of the following forms of business organization: partnership

A

splits liability

27
Q

Define and explain the advantages and disadvantages of the following forms of business organization: corporation

A

provided limited liability

28
Q

Discuss the advantages and disadvantages of the Free Market Economy.

A

Consumers are in charge

Disadvantage: government regulation

29
Q

How does a nation improve its standard of living?

A

through innovation

30
Q

What is the difference between demand and quantity demanded? Give an example of what would cause a change in each.

A

Demand is a change in price that causes a good to move up or down on the demand curve. Change in quantity demanded would cause the entire curve to shift (i.e. a change in consumer income levels)

31
Q

What is the difference between supply and quantity supply? Give an example of what would cause a change in each.

A

Supply is a change in price that causes a good to move up or down on the supply curve. Chang is quantity supplied would cause the entire curve to shift (i.e. a change in the price of resources)

32
Q

How do credit card companies make money?

A

interest

33
Q

What is a minimum payment on a credit card?

A

2-3% of your balance that is required to be paid every month

34
Q

What is included on your credit report?

A

Payment history, lines of credit, current total debt

35
Q

What is the Rule of 72?

A

Divide 72 by the interest rate to ascertain number of years to double an investment

36
Q

What does a production possibilities curve illustrate?

A

The combination of goods that can be produced with a set of resources

37
Q

What role do competition and self interest play in the free market?

A

Motivating factors that affect supply and demand

38
Q

What are the features of a market economy?

A

Supply and demand determine price

39
Q

How do economists calculate inflation?

A

Consumer Price Index

40
Q

What affects growth of savings over time?

A

time, investment size and interest rate

41
Q

How does risk relate to investment?

A

The higher the risk the higher rate of return or loss

42
Q

What is the difference between common and preferred stock?

A

Preferred stock: you get paid first

Common stock: you get to vote

43
Q

In a traditional economy, what are economic decisions based on?

A

Habit, custom or ritual decide question or production and consumption of goods and services

44
Q

Who is in charge of fiscal policy?

A

Federal Government (Congress) through taxation and spending

45
Q

Who is in charge of monetary policy?

A

Federal Reserve Bank through the setting of interest rates, buying bonds

46
Q

When would the government practice expansionary policy?

A

during a recession

47
Q

When would the government practice contractionary policy?

A

during times of inflation

48
Q

What type of economic system does America have?

A

modified free enterprise system

49
Q

What is the purpose of government safety net programs?

A

ask rose

Economics (7 decks)

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