Final Review Part 2 Flashcards
_____________________________ is the most highly valued, or next best alternative that is forfeited when a choice is made
Opp cost
A(n) _____ explanation of how something works and is designed to answer a q that has no obvious answer
theory
A service is not tangible but ________
intangible
Another word for dissatisfaction or unhappiness is ______
disutility
_____________ are needed to decide who gets what portion of the available goods. Because people compete for the _________, competition is a consequence of scarcity
Rationing devices
A(n) __________ is a gov plan specifying economic activities, such as what goods will be produced and what prices will be charged.
economic plan
The way all the income earned in a country is divided among diff groups of income earners is called _________________
income distribution
economy that’s not purely socialist or capatalist but sorta both
mixed economy
A sense of how the world works
vision
The belief that all value in produced goods is derived from labor
labor theory of value
The diff between the total value of production and the subsistence wages paid to workers, in other words, the difference between the value of a product and the cost to produce it
surplus value
Any good that is owned by an individual or a buisness
private property
Any good that is owned by the gov
public property
Failure to preserve natural resource for short term gain and self interest is known as ____________________
“the tragedy of the commons”
An economic unit of one person or more that sells resources that sells resources and buys goods and services
household
circular flow of econmic activity
The economic relationship that exist between different economic groups in an economy
The way in which a society decides what goods to produce, how to produce goods, and for whom goods will be produced
economic system
____________ is meeting present needs of without compromising the needs of future gen
Sustainability
3 pillars of sustainability are SEE
Social
Environmental
Economic needs
How to keep the economy sustainable
Use resources at a rate lower than the rate at which they are replenished
What goods and services should an economy produce?
should the emphasis be on agriculture, manufacturing or services, should it be sport leisure or housing?
Any place people come together to buy and sell goods or services
market
An economic system in which individuals (not the gov) own most, if not all, the resources and control their use. The government plays only a small part in thee economy
free enterprise
socialism
An economic system in which the government controls and may own many of the resources
A government plan specifying economic activities such as what goods will be produced and what prices will be charged
economic plan
The way all the income earned in a country is divided among different groups of income earners
income distribution
The belief that all value in produced goods is derived from labor
labor theory of value
The difference between the total value of production and the subsistence wages paid to workers
surplus value
The amount of money left over after all the costs of production have been paid. ______ exists whenever total revenue is greater than total cost.
profit
The amount of money by which total cost exceeds total revenue
loss
An agreement between two or more people to do something
contract
A good for which one person’s consumption takes away from another person’s consumption
private good
A good for which one person’s consumption does not take away from another person’s consumption
public good
A public good that individuals can be excluded (physically phrohibited) from consuming, even though it wouldn’t cost anything else to let another person use it (ie seeing a movie/getting a link to a online book)
excludable public good
A public good that individuals cannot be excluded (physically prohibited) from consuming
nonexcludable public good
A person who receives the benefits of a good without paying for it
free rider
An adverse side effect of an act that is felt by others
negative externality
A beneficial side effect of an action that is felt by others
positive externally
The willingness and ability of buyers to purchase different quantities of a good at diff prices during a specific time period
demand
law of demand
A law stating that as the price of a good increases, the quantity demanded of the good decreases, and that as the price of a good decreases, the quantity demanded of the good increases
The # of units of a good purchased at a specific price
quantity demanded
A law stating that as a person consumes additional units of a good, the utility gained from each additional unit of the good will eventually decrease
law of diminishing marginal utility
The numerical representation of the law of demand
demand schedule
The graphical representation of the law of demand
demand curve
The graphical representation of the law of demand
demand curve
A good for which the demand rises as income rises and falls as income falls
normal good
A good for which the demand rises as income rises and falls as income falls
normal good
A good for which the demand falls as income rises and rises as income falls
inferior goods
A good for which the demand remains unchanged as income rises or falls
neutral good
A similar good. With ________, the price of one and the demand for the other move in the same direction
substitute
The relationship between the percentage change in quantity demanded and the percentage change in price
elasticity of demand
The type of demand that exists when the percentage change in quantity demanded is greater than the percentage change in price
elastic demand
The type of demand that exists when the percentage change in quantity demanded is less than the percentage change in price
inelastic demand
The type of demand that exists when the percentage change in quantity demanded is the same as the percentage change in price
unit elastic demand
The willingness and ability of sellers to produce and offer to sell different quantities of a good at different prices during a specific time period
supply
The willingness and ability of sellers to produce and offer to sell different quantities of a good at different prices during a specific time period
supply
A law stating that as the price of a good increases, the quality supplied of the good increases, and as the price of a good decreases, the quantity supplied of the the good decresases
law of supply
A relationship between two factors in which the factors move in the same direction. For example, as one factor rises, the other rises too
direct relationship
The number of units of a good produced and offered for sale at specific price
Quantity supplied
A numerical chart illustrating the law of supply
supply schedule
A graph that shows the amount of a good sellers are willing and able to sell at various prices
supply curve
The body of skills and knowledge concerning the use of resources in production
technology
The ability to produce more output with a fixed amount of resources
advancement in tech
The ability to produce more output with a fixed amount of resources
advancement in tech
The average cost of a good. For example, if 400,000 is spent to produce 100 cars, average or _______ is 4000
per unit cost
A financial payment made by gov for a certain action
subsidy
A legal limit on the number of units of a foreign-produced good that can enter a country.
quota
The relationship between the percentage change in quantity supplied and the percentage change in price
elasticity of supply
The kind of supply that exists when the percentage change in quantity supplied is greater than the percentage change in price
elastic supply
The kind of supply that exists when the percentage change in quantity supplied is less than the percentage change in price
inelastic supply
The kind of supply that exists when the percentage change in quantity supplied is equal to the percentage change in price
unit elastic supply
The relationship between percentage change in quantity supplied and the percentage change in price
elasticity of supply
The kind of supply that exists when the percentage change in quantity supplied is greater than the percentage change in price
elastic supply
The kind of supply that exists when the percentage change in quantity supplied is less than the percentage change in price
inelastic supply
unit-elastic supply
The kind of supply that exists when the percentage change in quantity supplied is equal to the percentage change in price
fiscal policy
Changes the gov makes in spending or taxation to achieve particular econ goals
expansionary fiscal policy
An increase in gov spending or a reduction in taxes
contractionary fiscal policy
A decrease in gov spending or an increase in taxes
The situation in which increases in gov spending lead to reductions in private spending
crowding out
The part of income that’s left over after taxes are paid
after-tax income
The curve, named after econ Arthur Laffer, that shows the relationship between tax rates and tax revenues. According to the Laffer curve, as tax rates rise from 0, tax revenues rise, reach a max at some point, and then fall with further increases in tax rates
Laffer curve
An economy in which trades are made in goods and services instead of money
barter economy
The costs associated with the time and effort needed to search out, negotiatem and complete and exchange
transaction costs
A good that is widely accepted in exchange and in the repayment of debt
money
Anything that is generally acceptable in exchange for goods and services
medium of exchange
A common m/ used to express value
unit of account
Something with the ability to hold value over time
store of value
A banking arrangement in which banks hold only a fraction of their deposits and lend out the remainder
fractional reserve banking
The central bank of the United States
Federal Reserve System (the Fed)
Board of Governors of the Federal Reserve System
The gov body of the Federal Reserve system
The 12 member policy making group within the Fed. this committee has the authority to conduct open market operations
Federal Open Market Committee
A bank’s checking account with its Federal reserve district bank
Reserve account
Changes the Fed makes in the money supply
monetary policy
An increase in the money supply
expansionary monetary policy
A decrease in the money supply
contractionary monetary policy
The price of labor
wage rate
A demand that is the result of some other demand
derived demand
A federal law that specifies the lowest hourly wage rate that can be paid to workers
min wage law
An organization that seeks to increase the wages and improve the working conditions of its members
labor union
closed shop
An organization that hires only union members
Taft-Hartley Act
An act, passed in 1947 by the US Congress that made the closed shop illegal and allowed states to pass right to work laws. These laws prohibit employers from making union membership a condition of employment
An org that requires employees to join the union within a certain period after being hired
union shop
A work stoppage called by union members to put pressure on an employers
strike
A state law that prohibits the practice of requiring employees to join a union to work
right to work
gross domestic product
The total market value of all final goods and services produced annually in a country
double counting
Counting a good more than once in computing GDP
