Chapter 2 Flashcards
The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals
Economics
The part of economics study that looks at the behavior of people and organizations in particular markets
Microeconomics
The part of economics study that looks at the operation of a nation’s economy as a whole
Macroeconomics
The study of how to increase resources and to create the conditions that will make better use of those resources
Resource Development
A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all
Invisible Hand
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit
Capitalism
The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time
Supply
The quantity of products that people are willing to buy at different prices at a specific time
Demand
The price determined by supply and demand
Market Price
The degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product
Perfect Competition
The degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different
Monopolistic Competition
A degree of competition in which just a few sellers dominant the market
Oligopoly
A degree of competition in which only one seller controls the total supply of a product or service, and sets the price
Monopoly
An economic system based on the premise that some if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people
Socialism
The loss of the best and brightest people to other countries
Brain Drain
An economic and political system in which the government makes almost all economic decision and owns almost all the major factors of production
Communism
Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows
Free-Market Economies
Economic systems in which the government largely decides what goods and services will be produced, who will get them and how the economy will grow
Command Economies
Economic systems in which some allocation of resources is made by the market and some by the government
Mixed Economies
The total value of final goods and services produced in a country in a given year
Gross Domestic Product (GDP)
The number of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks
Unemployment Rate
A general rise in the prices of goods and services over time
Inflation
A situation in which prices are declining
Deflation
A situation when the economy is slowing but prices are going up anyway
Stagflation
