final Flashcards

1
Q

3 key questions

A

What to produce?
How to produce?
Who consumes?

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2
Q

Scarcity

A

unlimited wants exceed limited productive resources

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3
Q

Shortage(temporary) and the 3 causes

A

The demand for a product is greater than the supply of that product

Three causes- too much demand, not enough supply, gov. regulation

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4
Q

Goods v. Services

A

Goods are tangible items you buy, service is an act done for another

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5
Q

Four types of economies

A

Free market is run by the people

Mixed market is run by the people and government

Command is run by the government

Traditional is based on religion, culture, heritage

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6
Q

Why do markets exist?

A

b/c we cannot produce everything we need or want

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7
Q

Factors of production

A

Land is ingredients or parts of product

Labor is who does the work

Capital is any human made resources used to make a product

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8
Q

Capital

A

Human is knowledge or skill

Physical is tools

Financial is money

Social is connections

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9
Q

Opportunity cost

A

The option given up when you make a decision

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10
Q

Factor Markets is…

A

Where we trade our labor for pay

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11
Q

Product Market

A

Where we trade our money for product

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12
Q

Law of demand

A

When prices go up, quantity demanded goes down. Prices go down, and quantity demanded goes up.

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13
Q

Substitution effect

A

When you cannot get what you want so you have to settle for something else

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14
Q

Compliments

A

When you typically buy two things together

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15
Q

The law of supply

A

works the way it does because businesses want profit.

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16
Q

Equilibrium

A

The price of a product

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17
Q

Price floor

A

When the price cannot go any lower, like minimum wage

18
Q

Price ceiling

A

When the price cannot go any higher, like rent control

19
Q

Who sets it

A

The government sets both

20
Q

Measurements used for steady economic growth, stable prices, and full employment

A

GDP, inflation (CPI), and employment rate

21
Q

GDP

A

The dollar value of everything produced in a country in a year

22
Q

Four categories of spending

A

Government spending, consumer spending, net exports, investments

23
Q

Inflation

A

The general increase in prices and lowering the value of the dollar. Purchasing power is how far your money would go

24
Q

Recession and Depression

A

3-6 months and 6+ months of economic downturn

25
3 roles of $
Medium of exchange, store of value, standard value
26
Monetary policy
Amount of money in the economy
27
Fiscal policy
Government taxes and spending
28
Deficit
Not enough money to pay what is owed
29
Debt
The overall amount owed
30
Specialization
Focusing on one or a few skills/products at a time
31
Absolute advantage
The best overall based on the metric
32
Comparative advantage
Who has the lowest opportunity cost
33
Different opportunity costs > > > Higher standard of living
Creates comparative advantage > Allows specialization > Efficiency allows gains from trade
34
Tariffs
a tax placed on goods imported into a country
35
Quotas
Limits on the quantity of goods that can be imported into a country
36
Embargoes
A complete ban on trade with a country (usually due to political disputes)
37
Standards
Requirements a good must meet before it can be imported
38
Subsides
Government payments to domestic producers that help the domestic companies compete with producers in other nations
39
Circular flow
google it *fades out of existence*
40
Price floor and price ceiling
google *sigh*
41
Business cycle
google *jumps of brides*