Chapter 2 Flashcards
(19 cards)
Economics
The study of how society chooses to employ resources to produce goods and services and distribute the, for consumption among various competing groups and individuals. MOW: what gets made, how much is madeEx: a farm may produce tomatoes because there is a need for tomatoes and they may produce it
Microeconomics
The part of economics study that looks at the behavior of people and organizations in particular markets. MOW: looking into a particular market (smaller scale)Ex: looking into the fashion industry
Macroeconomics
The part of economic study that looks at the operation of a nations economy as a whole. MOW: looking at things on a much larger scaleex: seeing how countries are doing
Invisible hand
A phrase coined by Adam smith to describe the process that turns self-directed gain into social and economic benefits for all. MOW: in doing this for my personal gain I am helping the people as well.Ex: someone may find the cure for a disease and they make money from it al inhale helping those who have that disease.
Capitalism
A economic system in which all or most of the factors or production and distribution are privately owned and operated for profit. MOW: private companies can produce certain things for profitEx: Nestlé
Supply
The quantity of products that manufactures or owners are willing to sell at different prices at a specific time. MOW: the amount of products that are sold at a specific timeEx: a coat factory may sell more coats when it is cold.
Demand
The quantity of products that people are willing to buy at different prices at a specific time. MOW: the amount of products people are willing to buyEx: in the winter people by and want more winter clothes than they would in the summer
Market price
The price determined by supply and demand. MOW: price depending on how much is wanted/needed Ex: a coat is cheaper in the summer because people don’t really want them
Perfect competition
The degree of competition in which there are many sellers in a market and none is large enough to dictate the price of the product. MOW: sellers set their own prices based on what they want toEx: …
Monopolistic competition
The edge of competition in which a large number of sellers produce very similar products that buyers nevertheless perceived as different. MOW: many sellers whose products are similarnbut people perceive as differentEx: iPhone v. Droid
Oligopoly
A degree of competition in which just a few sellers dominate the market.Ex: air craft companies, it would be very expensive to start your own air craft manufacturing facility.
Monopoly
A degree in competition in which only one seller controls the total supply of a product or service and sets the price. MOW: one seller sellsEx: time Warner in soCal
Socialism
An economic system based on the premises that some if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people. MOW: an economic system in which businesses should share the wealth
Brain drain
The loss of the best and brightest people to other countries.MOW: losing great people to other countries because they are better off there (financially) Ex: doctors leave their countries and leave to America because the taxes on wealthy people is less.
Communism
A economic and political system in which the government makes almost all economic decisions and owns almost all of the major factors of production. MOW: the government runs and owns it all Ex: Stalin
Free market economics
Economic systems in which the market largely determines what goods and services get produced, who gets them and how the economy grows. MOW: the market dictates how much and what gets sold and to who
GDP
The total value of final goods and services produced in a country in a given year. MOW: the total value of goods and services producedEx: the US made 20,000 cans of soda and had a profit of 10,000 dollars
Recession
Two or more consecutive quarters of decline in the GDP. MOW: a decline in the amount of goods and services sold in two consecutive quarters Ex: 2008
Unemployment rate
The number of civilians at east 16 years old who are unemployed and tried to find a job within the prior four weeks. MOW: people without jobs
