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Economics final > final > Flashcards

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
Q

3 roles of $

A

Medium of exchange, store of value, standard value

26
Q

Monetary policy

A

Amount of money in the economy

27
Q

Fiscal policy

A

Government taxes and spending

28
Q

Deficit

A

Not enough money to pay what is owed

29
Q

Debt

A

The overall amount owed

30
Q

Specialization

A

Focusing on one or a few skills/products at a time

31
Q

Absolute advantage

A

The best overall based on the metric

32
Q

Comparative advantage

A

Who has the lowest opportunity cost

33
Q

Different opportunity costs > > > Higher standard of living

A

Creates comparative advantage > Allows specialization > Efficiency allows gains from trade

34
Q

Tariffs

A

a tax placed on goods imported into a country

35
Q

Quotas

A

Limits on the quantity of goods that can be imported into a country

36
Q

Embargoes

A

A complete ban on trade with a country (usually due to political disputes)

37
Q

Standards

A

Requirements a good must meet before it can be imported

38
Q

Subsides

A

Government payments to domestic producers that help the domestic companies compete with producers in other nations

39
Q

Circular flow

A

google it fades out of existence

40
Q

Price floor and price ceiling

A

google sigh

41
Q

Business cycle

A

google jumps of brides

Economics final (1 decks)

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