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Economy Honors > Unit 2 Flashcards > Flashcards

Unit 2 Flashcards

1
Q

Efficiency

A

Allocating resources in a way that maximizes the production of goods and services.

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2
Q

Equity

A

Fair distribution of wealth and income.

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3
Q

Growth

A

Increasing the amount of goods and services produced by an economy.

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4
Q

Stability

A

Maintaining steady growth and low inflation.

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5
Q

Traditional Economy

A

Based on customs, history, and time-honored beliefs. Economic decisions are made based on societal roles and culture.

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6
Q

Command Economy

A

The government makes all decisions about the production and distribution of goods and services. Examples include socialism and communism.

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7
Q

Market Economy

A

Decisions are driven by the interactions of supply and demand with little government intervention. Capitalism is an example.

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8
Q

Mixed Economy

A

Combines elements of market and command economies. Most modern economies are mixed, balancing some government intervention with market-driven principles.

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9
Q

demand

A

The quantity of a good or service that consumers are willing and able to purchase at various prices.

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10
Q

Law of Demand

A

As the price of a good falls, the quantity demanded generally rises, and as the price rises, the quantity demanded generally falls (ceteris paribus).

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11
Q

Substitution Effect

A

When the price of a good changes, consumers may substitute it for other goods that are relatively cheaper.

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12
Q

Income Effect

A

Changes in the price of a good affect the consumer’s purchasing power, thus affecting demand.

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13
Q

Demand Schedule

A

A table that shows the quantity demanded at different prices.

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14
Q

Demand Curve

A

A graph that shows the relationship between the price of a good and the quantity demanded.

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15
Q

Movement Along the Demand Curve

A

Caused by a change in the price of the good.

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16
Q

Shift of the Demand Curve

A

Caused by changes in factors other than the price of the good, such as:
Consumer income
Prices of related goods
Consumer expectations
Number of consumers
Consumer tastes

17
Q

Supply

A

The quantity of a good or service that producers are willing and able to sell at various prices.

18
Q

Law of Supply

A

As the price of a good rises, the quantity supplied generally rises, and as the price falls, the quantity supplied generally falls (ceteris paribus).

19
Q

Supply Schedule

A

A table that shows the quantity supplied at different prices.

20
Q

Supply Curve

A

A graph that shows the relationship between the price of a good and the quantity supplied.

21
Q

Movement Along the Supply Curve

A

Caused by a change in the price of the good.

22
Q

Shift of the Supply Curve

A

Caused by changes in factors other than the price of the good, such as:
Technology
Prices of relevant resources
Prices of alternative goods
Producer expectations
Number of producers

23
Q

Market Equilibrium

A

The point where the quantity demanded equals the quantity supplied.

24
Q

Surplus

A

When quantity supplied exceeds quantity demanded.

25
Q

Shortage

A

When quantity demanded exceeds quantity supplied.

26
Q

Price Floor

A

A minimum price set by the government, leading to surplus if above equilibrium price.

27
Q

Price Ceiling

A

A maximum price set by the government, leading to shortage if below equilibrium price.

28
Q

Price Elasticity of Demand

A

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

29
Q

Inelastic Demand

A

Quantity demanded changes little with a price change.

30
Q

Elastic Demand

A

Quantity demanded changes significantly with a price change.

31
Q

Availability of Substitutes

A

More substitutes make demand more elastic.

31
Q

Proportion of Budget

A

Goods that take a larger proportion of the consumer’s budget tend to have more elastic demand.

32
Q

Price Elasticity of Supply

A

A measure of how much the quantity supplied of a good responds to a change in the price of that good.

33
Q

Determinants

A

Factors such as production flexibility and time period considered can affect supply elasticity.

34
Q

Trademark

A

Protects brand names and logos.

35
Q

Copyright

A

Protects original works of authorship.

36
Q

Patent

A

Protects inventions and new processes.

Economy Honors (2 decks)

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