H - 201 Exam 1 Flashcards
Financial Capital is…
Money that can be used to purchase goods capital
Rivalry among individuals from sales to consumers; the natural regulator that makes the free market system work
Competition
Define: Assumption
Supposing something is true without proof
Term: Increase in an economy total output of goods and services
Economic Growth
Process of limiting the scope of an economic unit’s productive efforts instead of trying to produce everything it needs
Specialization
Define: Microeconomics
Deals with the economic problems of the individual, firm, and industry
Define: Capital Goods
Economic goods used to produce other consumer/capital goods
Define: Laissez faire
Policy of No Government intervention in economic activities and businesses
Define: Opportunity Cost
Value of the next-best alternative that must be sacrificed when a choice is made
The 4 main resources of a nation
Land, Labor, Capital, Enterprise
Position of stability/rest where quantity supplied = quantity demanded
Equilibrium
Define: Paradox of Thrift
Saving by individual/families is desirable for increasing capital formation
BUT
undesirable for national income resulting in increased unemployment
Define: Consumer Goods
Economic goods that are directly utilized by consuming public goods
What is the “Functional Distribution of Income?”
Hint: Is used in a market economy, payment for use of the productive resources
A pattern answering the question about
What share of PAYMENT each route recipe e for its contribution to the total production.
Define: Labor
Time and effort expended by human being involved in the production process
Define: Utility
The ability of a good/service to satisfy a want
Define: Total Product
The sum of all the goods/services produced by an economy over a given period
Define: Economic Good
Object/service that has utility, is scarce, and transferable
Strict government regulation of production, distribution, and advocates ways to promote equality and economic development. Is authoritarian.
What are the country examples?
(1 of 3 vrsn. Command Economies)
Socialism
- Denmark, Sweden, Soviet, E. Europe
An authoritarian state imposed on a capitalist system.
System that combines monopoly, capitalism, private property, and strong dictatorial central government.
What are the country examples?
(1 of 3 vrsn. Command Economies)
Fascism
Portugal, Spain, Italy, Germany
Government ownership of land, capital, and government regulation of distribution. -Private property is non-existent
What are the country examples?
(1 of 3 vrsn. Command Economies)
Communism
Cuba, Venezuela
3 Roles of Prices on Market Economy
Deciding Income
Rationing Consumer Demand
Allocating Resources
Normative Economics
Economics dealing with “what OUGHT to be.”
Entrepreneur
Person who organizes and assumes the risk of a business venture
6 characteristics of Economic Liberalism
Freedom of Action for the Individual Doctrines of Free-Trade Self-Interest Private Property Laissez-Faire Competition
Frequently a market for goods and services may be more orderly and serve the consuming public better better if the firms involved are regulated to some degree by government agency.
-Public utilities traditionally fall under this form of control.
Regulation
