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Government and Economics > Economics > Flashcards

Economics Flashcards

1
Q

What are the three main parts of Economics? hint PDC

A

Production, Distribution, and Consumption.

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2
Q

Define Scarcity?

A

Our resources are limited.

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3
Q

With Economics we start learning more about the _____ we have to make?

A

Choices.

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4
Q

With Choices comes a certain ___?

A

Cost.

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5
Q

Everytime we get something, we..

A

give something up.

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6
Q

What are the 3 factors of production? LLC

A

Land, Labor, and Capital.

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7
Q

What is an Entrepreneur?

A

A person who puts together land, labor, and capital to make new businesses.

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8
Q

What is it called when we choose one course of action over another?

A

Trade-off.

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9
Q

What is it called when we give up the most desirable alternative given up for the decision?

A

Opportunity cost.

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10
Q

What is thinking at the margin?

A

Sometimes a decision involves whether to add or subtract one additional unit of a resource.

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11
Q

What does a production of possibilities graph show?

A

Alternative ways of using a country’s or producer’s resources.

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12
Q

What is efficiency?

A

Uses it’s resources in such a way to maximize production.

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13
Q

What is under-utilization?

A

An economy using fewer resources than it is capable of using.

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14
Q

What does the production of possibilities frontier line show on the graph?

A

It shows the maximum possible production.

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15
Q

In a traditional economy what do people live and work as?

A

Their ancestors.

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16
Q

In a free market economy what are people free to do?

A

Buy and sell whatever their money allows.

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17
Q

In a centrally planned economy who makes all the economic decisions?

A

The Government.

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18
Q

What do nations today prefer?

A

A mixed economy.

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19
Q

What is the term used to describe the belief that the government should not intervene in the market?

A

Laissez-Faire.

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20
Q

The free enterprise is a mostly free market economy with…

A

limited government intervention.

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21
Q

In the free enterprise, the government does intervene in the economy when it is…

A

in the public interest.

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22
Q

What is it called when the market doesn’t provide the goods or services consumers need?

A

A market failure.

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23
Q

What is public goods?

A

A good or service created by the government through tax dollars.

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24
Q

What is it called when a person uses a good or service but would not choose to pay for the good and service?

A

A free rider.

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25
Q

What is Automobile pollution an example of?

A

Negative externality.

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26
Q

What is the cancer fighting properties in tomato sauce an example of?

A

Positive externality.

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27
Q

Demand curve shows how price influences the amount…

A

people want to buy.

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28
Q

Demand schedule records…

A

the quantity demanded at various prices.

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29
Q

What is the law of demand?

A

States that consumers buy more of a good when its price decreases.

30
Q

The substitution effect occurs when a consumer reacts to an increase in a good’s price by buying less of that good and more…

A

of a similar yet cheaper good.

31
Q

What is the income effect?

A

The change in consumption resulting from change in income. OR When prices rise, your money buys less.

32
Q

The law of supply is the tendency of suppliers to offer more of a good at a…

A

higher price.

33
Q

A supply curve is a graphic representation showing the tendency of suppliers to supply…

A

more at higher prices.

34
Q

A supply curve will always rises…

A

left to right.

35
Q

Elastic is blank to changes in price or income.

A

Sensitive.

36
Q

Inelastic is blank to changes in price or income.

A

Insensitive.

37
Q

If equilibrium is quantity supplied equals quantity demanded then disequilibrium is…

A

Quantity supplied that does not equal the quantity demanded.

38
Q

What is it called when the quantity supplied is greater than quantity demanded?

A

Surplus.

39
Q

What is another name for surplus?

A

Excess supply.

40
Q

Does the price have to raised or lowered to restore the market to equilibrium if a surplus happened?

A

Lowered.

41
Q

What is it called when quantity demand is greater than quantity suplied?

A

Shortage.

42
Q

What is another name for shortage?

A

Excess demand.

43
Q

When a shortage happens do you have to raise or lower the price to restore the market to equilibrium?

A

Raised.

44
Q

If prices are viewed as lights on a traffic light, what are high prices (green/red) to consumers/suppliers? 2 answers.

A 
consumers = red
suppliers = green
45
Q

If prices are viewed as lights on a traffic light, what are low prices (green/red) to consumers/suppliers? 2 answers.

A 
consumers = green
suppliers = red
46
Q

Why is rationing costly to administers?

A

It requires government planning.

47
Q

What are corporations owned by?

A

Stockholders.

48
Q

What can corporations not be ? Because they are considered separate entitys.

A

Sued.

49
Q

What is it called after corporations pay taxes on their profits, and individual stockholders must also pay taxes on their dividends or share of their profits?

A

Double Taxation.

50
Q

When a person buys stock, he is buying partial ownership in a…

A

corporation.

51
Q

When a person buys a bond, he is loaning money to a corporation or g…

A

government.

52
Q

Stocks, you … Bonds, you ….

A

Stocks, you own. Bonds, you loan.

53
Q

What is it called when investors make money on their investment?

A

Return.

54
Q

What is the term that describes payments made by corporations to stockholders?

A

Dividends.

55
Q

Describe what Capital Gain is?

A

Selling a stock for more than its original purchase price.

56
Q

If Capital Gain is selling a stock for more than its original purchase price, what is Capital Loss?

A

Occurs when an investor sells his stock for less than the original purchase price.

57
Q

What is the “thing” called that monitors and reports generally on the trading activities of thirty of the most powerful companies?

A

The Dow or The Dow Jones Industrial Average.

58
Q

What is it called when the stock market rises steadily over a period of time?

A

A Bull Market.

59
Q

What is it called when the stock market falls over a period of time?

A

A Bear Market.

60
Q

What determines how much money each person in a society would receive if wealth from GDP was divided equally among the people of that nation?

A

Real GDP Per Capita.

61
Q

Describe what Capital Deepening is…

The process of increasing the amount of…

A

capital per worker.

62
Q

What is the tool for tracking macroeconomic progress?

A

GDP (Gross Domestic Product).

63
Q

What is Gross Domestic Product?

A

Is the dollar value of all final goods and services produced within a country’s borders in a given year.

64
Q

Explain the difference between durable and non-durable goods?

A

Durable is when goods last for a long time.

Non-durable is when goods last for a short time.

65
Q

What is it called when a contraction lasts for atleast six months?

A

Recession.

66
Q

Blank is a particularly severe and long contraction.

A

Depression.

67
Q

What is the money supply made of?

HINT- two things that start with M.

A

M1 and M2.

68
Q

If M1 is money that people can easily use to pay for goods and services, like cash and checks. Example what M2 is…

A

Assets that must be converted to cash before they are used, like savings accounts and mutual funds.

69
Q

What is Interest?

A

The price of borrowed money.

70
Q

By learning the language of banking,…

A

a person makes better choices.

Government and Economics (13 decks)

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