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Economics > Final Exam Review > Flashcards

Final Exam Review Flashcards

1
Q

Economics is the study of what?

A

The study of the choices that individuals and societies make in the production, distribution, and consumption of goods.

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2
Q

What is an economy?

A

Any system for the production, distribution, and consumption of goods and services.

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3
Q

The economic system in Plymouth called Common Course and Condition is a form of _____.

A

Communism

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4
Q

What is macroeconomics?

A

The study of national and international economies and how these major economies are affected by large scale choices and public policies.

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5
Q

What is microeconomics?

A

The study of specific components within a major economy and how the choices made by individuals, households, and businesses affect that economy.

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6
Q

What is a tangible item that people want and for which they will pay?

A

Good

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7
Q

What are intangible goods produced by labor for which people expect to pay?

A

Services

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8
Q

What is a human desire?

A

Want

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9
Q

What is a mechanism that allows people to exchange goods?

A

a Market

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10
Q

What is the quantity of a good for sale at a certain price under certain conditions?

A

Supply

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11
Q

What is the amount of a good that is bought at a certain price under certain conditions?

A

Demand

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12
Q

Who are the people who provide goods?

A

Producers

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13
Q

Who are the people who use goods?

A

Consumers

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14
Q

What is the first thing to understand about economics?

A

All goods have to be worked for.

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15
Q

What is the bad habit of spending more than one can afford?

A

Prodigality

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16
Q

What is a necessity, or something that would be difficult to do without?

A

Need

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17
Q

What are the general rules or principle guiding the production distribution and consumption of goods?

A

Law of Economics

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18
Q

From early in the 16th century until the 18th century the principle states Europe followed what set of economics policies?

A

Mercantilism

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19
Q

What are taxes that government applies only to imported goods?

A

Tariffs

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20
Q

What is the difference in the value of goods that a country sells abroad compared to those it purchases from other countries?

A

Trade Balance

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21
Q

What Economics policy established colonies and extensive territories created to benefit their mother country?

A

Imperialism

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22
Q

Who were the French economists that favored the natural economy opposed to the artificial?

A

Physiocrats

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23
Q

What is the French phrase that means let things alone?

A

laissez-faire

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24
Q

Who is the founder of modern economics?

A

Adam Smith

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25
Q

Who wrote the wealth of nations?

A

Adam Smith

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26
Q

What is the separation of work into individualized tasks?

A

division of labor

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27
Q

What does “invisible” hand mean?

A

brought together

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28
Q

What is the division of labor that allows the production of goods by workers doing the jobs they do best?

A

specialization

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29
Q

What is the term for economic success?

A

prosperity

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30
Q

What is the value of all things that people own?

A

wealth

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31
Q

What is the human activity which results in the creation of goods and services?

A

Labor

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32
Q

Goods that last less than 3 years are called?

A

Nondurable goods

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33
Q

Goods that last at least 3 years are called?

A

Durable goods

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34
Q

Who determines what goods are to be produced and in what quantity in a free market economy?

A

The Consumer

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35
Q

What is a system that gives people only limited choices regarding what to produce and consume?

A

Traditional Market Economy

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36
Q

What is the alternative, illegal system for exchanging goods to avoid governmental regulations?

A

Black Market

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37
Q

What part of an economy is controlled by private individuals, businesses, and organizations?

A

Private Sector

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38
Q

What part of an economy is controlled by national, state, and local governments?

A

Public Sector

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39
Q

What is the desire to work to improve one’s economic situation?

A

Profit Motive

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40
Q

The diminishing of the value of goods that is caused by wear and time is known as what?

A

Depreciation

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41
Q

What is the excess of the total revenue paid by buyers for goods over the seller’s total expense of producing these goods?

A

Profit

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42
Q

what indicates that people tend to substitute less expensive goods for ones whose prices have risen?

A

substitution effect

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43
Q

The cost of labor, and what it would cost people who run their own establishments to hire managers to run the business for them is called the _____ __ ________.

A

Wage of Management

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44
Q

What is the total value of a business minus any liabilities?

A

Equity

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45
Q

What is the quality of producing goods efficiently with a minimum of waste?

A

Efficiency

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46
Q

There are only ___ ways to improve efficiency.

A

Two

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47
Q

what is the value that is directly related to the benefits their owners receive through their use?

A

value in use

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48
Q

what a particular good is worth in exchange for some other good is what?

A

value in exchange

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49
Q

what is the amount of money that a buyer pays the seller for a particular item?

A

price

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50
Q

what are prices at which goods can be sold in an open market with many potential sellers and buyers?

A

market prices

51
Q

what is the amount of satisfaction that results from a one unit increase of a product?

A

marginal utility

52
Q

what states that as ones supply of a specific good or service increase, the satisfaction derived from each additional unit tends to decrease?

A

diminishing marginal utility

53
Q

what is the total amount of satisfaction received for possessing a particular amount of good?

A

total unity

54
Q

what explains the inverse relationship between the price of a good and the amount that people choose to buy?

A

law of demand

55
Q

what says that when the price of a good falls, consumers tend to buy more of that good or of other items because they can do so without giving up anything?

A

income effect

56
Q

what indicates that people tend to substitute less expensive goods for ones whos prices have risen?

A

substitution effect

57
Q

what is the list of numbers that compare price with quantity demanded?

A

demand schedule

58
Q

What is the sum of all of the factors of production used in making goods.

A

Total Cost

59
Q

What is the sum cost of all the factors of production used in producing ONE unit of a good?

A

Average Cost

60
Q

It is _______ _____ that creates the wealth of nations.

A

Intelligent Work

61
Q

The 3 qualities of mass production are:

A
  1. division of labor
  2. standardization of parts
  3. automatic conveyance
62
Q

What is the ability of one entity to produce goods or provide services more efficiently than his competitors when given the same resources?

A

Absolute Advantage

63
Q

What is the ability of an entity to produce a good or service at an opportunity cost that is lower than that of another produce.

A

Comparative Advantage

64
Q

What is the production of goods in which a country or region has absolute or comparative advantage?

A

Geographic Specialization

65
Q

The theory that domestic manufacturers need government protection against foreign competitors is known as __________.

A

Protectionism

66
Q

what is the graphic representation of the quantity of goods purchased at different prices?

A

demand curve

67
Q

What law states the direct relationship between the price of a good and the amount that suppliers make available?

A

The Law of Supply

68
Q

What is a list of numbers that compares price with quantity supplied?

A

Supply Schedule

69
Q

What is a graphic representation of the quantity of goods supplied at different prices?

A

Supply Curve

70
Q

What phenomenon describes how people will buy less as prices go up?

A

Price Elasticity of Demand

71
Q

What are price levels set above equilibrium prices?

A

Price Floor

72
Q

A _____ is when the government places a limit on how high a producer may charge for his product.

A

Price Ceiling

73
Q

Who was the main advocate of the Principal of Comparative Advantages?

A

David Ricardo

74
Q

What are groups of firms that produce similar products or provide similar services??

A

Industries

75
Q

What is the situation that arises when a single firm is the only supplier of a good for which no substitute exists?

A

a Monopoly

76
Q

What is the difference between a monopoly and a legal monopoly?

A

A monopoly is illegal, but a legal monopoly is when the government lets a business have a monopoly to encourage production.

77
Q

What kind of monopoly occurs when a single firm can fill the demand for a good more efficiently than if there were multiple firms in the industry?

A

a Natural Monopoly

78
Q

What is it called when each firm promotes a differentiated product?

A

Monopolistic Competition

79
Q

What kind of market is one in which each firm promotes a differentiated product?

A

Monopolistic Competition

80
Q

What is a market that occurs when an industry is dominated by only a few firms?

A

Oligopoly

81
Q

What is it called when companies get together to set unnecessarily high prices?

A

a Collusion

82
Q

What is a collusion of businesses which join together to restrict or eliminate competition?

A

a Trust

83
Q

What is anything that is generally accepted as a means of payment?

A

Money

84
Q

What are the 3 principal purposes that money functions as?

A
  1. To be a medium of exchange
  2. To provide a measure of value
  3. To provide a store of value
85
Q

What is coined, metallic money?

A

Specie

86
Q

What is the asserted face value?

A

Face Value

87
Q

When the level of prices in the market rises because too much money is in circulation?

A

Inflation

88
Q

If prices decrease because money seems more valuable and stable?

A

Deflation

89
Q

A system which allows banks to hold less than 100% of deposits in reserve is what?

A

Fractional Reserve Banking

90
Q

What is legal tender that is backed by nothing but a government’s promise?

A

Fiat Money

91
Q

What does M1 include?

A

Transaction accounts, (checking accounts, money market accounts, etc.), and traveler’s checks and all coins and currency.

92
Q

What does M2 include?

A

M1 and non-checkable savings deposit, money market mutual funds and similar deposits, and time deposits worth less than $100,000

93
Q

What is selling the same type of goods at different prices to different buyers?

A

Price Discrimination

94
Q

What is the quantity of producing effectively with a minimum of waste?

A

Efficiency

95
Q

What is the total amount invested in the production of a good?

A

Input

96
Q

What is the total amount of a good that is produced?

A

Output

97
Q

What is the commitment of resources to a project or purpose that is expected to bring future profit to the investor?

A

Investment

98
Q

What is a debtor?

A

One who borrows money or capital.

99
Q

What is a creditor?

A

One who lends money or capital.

100
Q

What does M3 include

A

M1 and M2 and time deposits over $100,000

101
Q

What is a period, usually six months or longer, during which the economy recedes or declines?

A

Recession

102
Q

What is the theory that the variation in the money supply is the main source of economic fluctuations?

A

Monetarism

103
Q

What is an account that guarantees a certain interest rate and has a specified maturity date?

A

CD (Certificate of Deposit)

104
Q

What is an account that allows limited transactions and pays an interest rate that changes with the demand for loans?

A

Money Market Account

105
Q

What is a contract between two parties in which one party protects the other against certain types of loss in exchange for payments called premiums?

A

Insurance

106
Q

What is an arrangement provided by an individual’s employer for the intent of providing for the employee’s retirement from work?

A

Pension Plan

107
Q

What is the resources corporations gather by selling ownership in their businesses?

A

Stocks

108
Q

What is a legal entity which is distinct from the people who own it?

A

Corporation

109
Q

What is equal portions of a corporation’s stock?

A

Shares

110
Q

If a corporation fails or declares bankruptcy, the individual stockholders do not personally have to pay the firm’s creditors. This is called what?

A

Limited Liability

111
Q

What is shares of a corporation’s profit?

A

Dividends

112
Q

What is a document that guarantees the bondholder the amount of his original investment plus a specified rate of interest by a certain date?

A

Bond

113
Q

What are assets that flow easily since they can be converted into other investments or cash without much time or difficulty?

A

Liquid Investments

114
Q

What is an established system of political administration by which a nation, state, society, or organization is ruled?

A

Government

115
Q

What is an economic system based upon collective ownership and control of natural resources?

A

Socialism

116
Q

What are are 5 government practices that have harmed economic systems over the centuries?

A
  1. Excessive Taxation
  2. Inflation and Debasement of Money
  3. Excessive Public Expenditure
  4. Excessive Regulation and Direction of the Economy
  5. Political Plundering of the Economy
117
Q

What are large, complex organizations made up of appointed officials and their numerous agencies and departments?

A

Bureaucracies

118
Q

Who was the founder of the Keynesian school of Economics?

A

John Maynard Keynes

119
Q

What is the belief that a society’s economic problems can be better solved by “expert planners” than by the natural, automatic corrections made by a free market?

A

Keynesianism

120
Q

What are the recurrent fluctuations in the level of economic activity form that economists call?

A

Business Call

121
Q

What is the value of all finished goods and services produced within a country during a year’s time.

A

Gross Domestic Product (GDP)

122
Q

What is the high point of the business cycle called?

A

Peak

123
Q

What is the low point of the business cycle called?

A

Trough

124
Q

What is a boom in the business cycle?

A

Recession

Economics (7 decks)

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