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Consumer Ed Honors > Economics > Flashcards

Economics Flashcards

(92 cards)

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1
Q

Supply

A

The amount of a good or service a firm wants to sell, and is able to sell per unit time.
-Ability/willingness of the seller to make the stuff available for sale

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2
Q

Demand

A

The amount of a good or service a consumer wants to buy, and is able to buy per unit time

  • Ability/willingness of the consumer to buy something
  • As price increases, quantity demand increases
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3
Q

Supply curve

A
  • Shows the The quantity supplied a each price, holding constant all other determinants of supply
  • Dependent variable is the quantity supply
  • Independent variable is the good’s price per unit
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4
Q

Demand curve

A

-Shows the demand of each price, holding constant all other determinants of demand
The DEPENDENT variable is the quantity demanded
• The INDEPENDENT variable is the good’s price per unit

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5
Q

Positive change in supply: what does it look like and why is it caused

A
  • Shift to the right
  • Weather
  • Prices of factors of production
  • Changes in production efficiency
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6
Q

Negative change in supply: what does it look like and why is it caused

A
  • Shift to the left
  • Weather
  • Prices of factors of production
  • Changes in production efficency
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7
Q

Positive change in demand: what does it look like and why is it caused

A
  • Consumer income increases (shift to the right)
  • Consumer tastes
  • Availability of substitutes (decreases)
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8
Q

Negative change in demand: what does it look like and why is it caused

A
  • Consumer income decreases (down)
  • Consumer tastes
  • Availability of substitutes (increases)
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9
Q

Changes in consumer income

A

Normal good and inferior good

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10
Q

Normal good vs inferior good

A

Normal
-When an increase in income causes and increase in demand. EX: organic food, coffee

Inferior
-When an increase in income causes a decrease in demand
EX: Maruchan, potatoes

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11
Q

What is a substitute and what makes two things substitutes

A

-Alternatives
-An increase in the price of one of them causes an increase in demand for the other
EX: An increase in the price of Nike Shoes would increase the demand for Adidas Shoes (assuming
they are substitutes)

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12
Q

What makes two things compliments

A

-An increase in the price of one of them causes a decrease in the demand for the other
EX: Thus, an increase in the price of bread would decrease the demand for eating peanut butter
(assuming they are compliments)

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13
Q

Equilibrium pt

A

Where supply and demand are equal

-AKA market price

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14
Q

Needs vs wants

A

Needs: basic to survival

Wants: Add to the quality of life

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15
Q

Goods

A

Things you can see and touch.

-Tangible products

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16
Q

Services

A

Wants satisfied through the efforts of other people or through the use of equipment.

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17
Q

Types of resources

A
  • Natural
  • Human (labor)
  • Capital
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18
Q

Natural resources

A

All of the materials that come from earth, the water, or the air.

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19
Q

Human resources

A
  • AKA labor

- The people who work to produce goods and services

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20
Q

Capital resources

A

The tools, equipment, and buildings that are needed to

produce goods and service. This includes the money needed to run firms.

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21
Q

Scarcity

A
  • Situation in which consumer wants are greater than the resources available
  • Lack of resources
  • Consumer wants are greater than supply
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22
Q

Key economic questions

A

-WHAT to goods and services are to be produced
HOW should the goods and services be produced
-What needs and wants will be satisfied with goods and services being produced
(FOR WHOM?)

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23
Q

Surplus

A

Excess goods and services that cannot be sold because the price was too high

  • More than enough product to meet the demand
  • Top triangle
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24
Q

Shortage

A

Not enough goods and services available to meet demand because consumers are willing to pay more than current price.

  • Not enough product to meed the demand
  • Bottom triangle
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25
Importing
Buying things from other countries
26
Exporting
Selling things to other countries
27
Trade surplus
When the exports are greater than the imports | -More money coming in than your are spending
28
Trade deficit
When imports are greater than exports | -Buy more than we sell, deficit of money
29
Absolute advantage
Exists when a country can produce a good or service at lower cost than other countries - South American countries: coffee - Saudi Arabi: oil
30
Comparative advantage
A situation in which a country specializes in the production of a good or service at which it is relatively more efficient Ex: of the market is better for computers over clothing, the country will produce computers
31
What discourages international trade and why do countries use them
-Tariffs -Quotas -Embargos Countries can use these barriers to encourage domestic purchasing or to show disapproval of a countries policies
32
What encourages international trade
Free trade zones | Free trade agreements
33
Tariffs
A tax that a government places on certain imported products
34
Quotas
Setting a limit on the quantity of a product that can be imported or exported within a given period to regulate international trade
35
Embargos
Stopping the export and import of a products
36
Free trade zones
A selected area where products can be imported duty-free and the. Stored, assembled, and or used in manufacturing -the duty free products usually around an airport or seaport
37
Free trade agreements
Member countries agree to remove duties and trade barriers on products traded among them Ex: NAFTA (North American Free Trade Agreement)
38
Multinational corporations
An organization that does business in several countries Usually consist of a parent company in a host country and the same separate companies in one or more foreign countries
39
Economic systems
- Market - Command - Traditional - Mixed
40
Traditional economy
Goods and services are produced the way it always has been done -Traditions dictate how the economic questions are answered
41
Market economy
Resources are owned and controlled by the people of the country - Individuals buying and selling goods and services in the market place answers the three economic questions - Limited government involvement - Profit motive and marketing
42
Command economy
Resources are owned and controlled by the government - The government decides how the economic questions are answered - little economic freedom - no competition, no 1% issues, no innovations, no profit motive
43
Mixed economy
* There is a combination of command & market economies | * Many command economies are transitioning over to mixed
44
Inflation
-Increases in the price of products and services over a measurable period of time Inflation Increases = Purchasing Power Decreases
45
Causes of inflation
- Increased demand - Increased costs - Oversupply of money
46
Exchange rate
Value of one currency expressed in terms of the another currency
47
Monetary policy
Adjusting interest rates and the supply of money | -inflation rates
48
Fiscal policy
Policies regarding spending and taxation | -Determining how to use government money to influence the economy
49
Depression
Severe and prolonged downturn in economic activity -increased unemployment -Volatility in currency value fluctuations -
50
Recession
Shorter term, often a few months/quarters of declined economic activity (GDP)
51
SEC
- Security and exchange commission - Federal agency that monitors the stock market - Protect investors - Maintain fair, orderly, and efficient markets - Facilitate capital formation
52
CPSA
Consumer Product Safety Act (CPSA) - Has authority to ban and recall products - Develops safety standards
53
FCC
Federal Communications Commission - Regulates interstate communications by radio, television, wire, satellite, and cable - If a radio tv station airs offensive language or graphics, a fine would be given by the FCC
54
FTC
Federal Trade Commission - Promotes consumer protection - Elimination and prevention of anti-competitive policies like a monopoly - Fed agency that regulates fair competition
55
FDIC
Federal Deposit Insurance Corporation - Get your money back after a bank failure - Provide stability to economy and failing business - Insures about 250,000 per depositor
56
EPA
Environmental Protection Agency | -Protects human and environmental health
57
BBB
Better Business Bureau - Private organization that gathers information on local businesses - Gives businesses and charities or whatever rankings
58
Deceptive advertising
False advertisings. The use of false, misleading, or unproven information to advertise products to consumers.
59
Comparative advertising
*Advertisers that relates its products qualities to those if a competing product EX: comparing Kirkland and the OG brand
60
Persuasive advertising
- Ethos, Pathos, Logos | - Advertising that is design to appeal to emotions and get you to buy something:
61
Informative advertising
- Educates the public on the features - Is carried out in an informative manner. The idea is to give the ad the look of an official article to give it more credibility
62
Buyer's remorse
Sense of regret after having made a purchase. Associated frequently with the purchase of an expensive item
63
Impulse purchase
• Unplanned discussion to buy a product or service made just before the purchase. Emotions and feelings play a decisive role bc of exposure or smth
64
Advertising that is design to appeal to emotions and get you to buy something:
Persuasive advertising
65
Advertisers that relates its products qualities to those if a competing product:
Comparative advertising
66
Feeling of regret after making a purchase:
Buyers remorse
67
Comparative advantage
A situation in which a country specializes in the production of a good or service at which it is relatively more efficent
68
Prosperity
The highest point in business cycle
69
Exchange rate
The price of currency in terms of another currency: e
70
3 Factors of production
Land, labor, capital
71
When a country imports more than it exports
Trade deficit
72
If prices continue to increase, the quantity supplied of the product will_____:
Increase
73
Quantity supplied
How much a firm is willing, able and wanting to make
74
If a radio tv station aids offensive language or graphics a fine would be levied by this organization
FCC. Federal Communications Commission
75
Decision made on a whim:
Impulse purchase
76
As prices rise, quantity demanded will____:
Increase
77
Federal agency monitors the stock market:
SEC
78
When supplied outnumbers quantity demanded
Surplus
79
U.S example of this type of economy. Businesses can make most of their decisions, but government has some control:
Mixed economy
80
An economy that the government tells you what to produce
Command economy
81
Pt where quantity supplied equals the quantity demanded
Equilibrium point
82
NAFTA was the trade agreement among which three countries
America, Canada, Mexico
83
Consumers wants are greater than the the resources available:
Scarcity
84
opportunity cost
Value of the best alternative when making a descision
85
Increase in prices that reduces the purchasing power of money
Inflation
86
Fed agency that regulates fair competition:
FTC
87
Tax paid on imported good
Tariffs
88
Things you can’t live without
Needs
89
Two results of competition
Lower prices, higher product quality
90
Private organization that gathers information on local businesses
BBB
91
Products sold to other countries
Exports
92
Products bought from other countries
Imports

Consumer Ed Honors (5 decks)

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