Final

Question 1

The science of how and why people, business, and governments make the choices that they do

Answer 1

Economics

Question 2

the condition of having unlimited wants and thus never being satisfied

Answer 2

Insatiability

Question 3

the condition of a good or service being finite or limited in quantitiy

Answer 3

Scarcity

Question 4

items that bear a positive economic cost

Answer 4

Economic Goods

Question 5

value ascribed to a good or service because of its nature

Answer 5

Intrinsic Value

Question 6

the riddle that asks which is more valuable, a handful or diamonds or a glass of water, solved by Carl Menger in 1871 when he said value is determined by the buyer

Answer 6

Diamond-Water Paradox

Question 7

the worth of a good or service as determined by its usefulness to the buyer

Answer 7

Subjective Value

Question 8

the level of economic study that is concerned with choices made by individual units

Answer 8

Microeconomics

Question 9

the level of economic study that is concerned with large-scale economic choices and issues

Answer 9

Macroeconomics

Question 10

a graph formed by the plotting of data involving two variables and the connecting of the resulting points to form a line of infinite information from the data

Answer 10

Line Graph

Question 11

a model depicting the flow of economic goods and services between households, business firms, the government, and the financial markets

Answer 11

Circular Flow Model

Question 12

the total expenditures made by all households

Answer 12

Consumption Expenditures

Question 13

a situation in which a government, business firm, or individual receives more income then is paid out in expenses

Answer 13

Budget Surplus

Question 14

the action of withdrawing money from an account or borrowing money

Answer 14

Dissaving

Question 15

the number of units of a product that will be bought at a given price

Answer 15

Demand

Question 16

a graph illustrating the various quantities of an item that are demanded at various prices

Answer 16

Demand Curve

Question 17

an item for which demand typically increases when the buyers’ incomes increase

Answer 17

Normal Goods

Question 18

an item that typically experiences a decrease in demand as buyers’ incomes increase

Answer 18

Inferior Goods

Question 19

items that resemble one another and that may be used in place of each other

Answer 19

Substitute Goods

Question 20

items that are usually purchased or used together

Answer 20

Complementary Goods

Question 21

a law stating that the higher the price buyers are willing to pay, other things being held constant, the greater the quantity of the product a supplier will produce and vise versa

Answer 21

Law of Supply

Question 22

the point at which the demand curve and the supply curve for an item intersect

Answer 22

Market Equilibrium Point

Question 23

an excess of unsold products resulting from a price above the market equilibrium price

Answer 23

Surplus

Question 24

a barrier preventing the price of an item from falling lower that a certain price

Answer 24

Price Floor

Question 25

an insufficient supply of an item as a result of a price below its market equilibrium price; when various factors hold the price of a good lower than its market equilibrium price

Answer 25

Shortage

Question 26

a barrier preventing the price of an item from rising above a certain price

Answer 26

Price Ceiling

Question 27

describes a business firm that uses a great deal of human labor relative to real capital

Answer 27

Labor Intensive

Question 28

describes a business firm that uses more automated equipment than human labor

Answer 28

Capital Intensive

Question 29

an increase in the quantity of goods and services a nation can produce

Answer 29

Economic Growth

Question 30

an economic philosophy commonly held in Europe from the 16th to the 18th centuries that advocated the accumulation of gold and silver as national wealth

Answer 30

Mercantilism

Question 31

the idea that government should generally leave the economy of a nation alone and allow the people to seek their own profit

Answer 31

Laissez Faire

Question 32

an economic system in which private individuals own most of the factors of production and make most economic decisions

Answer 32

Capitalism

Question 33

an economic system in which a central authority, committee, or the people in common generally own the factors of production and make economic decisions

Answer 33

Socialism

Question 34

the government's selling of nationalized business back to private owners

Answer 34

Privatization

Question 35

the government's acquisition of the ownership of major industries

Answer 35

Nationalization

Question 36

a lender to whom a debt is owed

Answer 36

Creditor

Question 37

a business firm that is owned by one person

Answer 37

Sole Proprietorship

Question 38

a partner in a limited partnership who has no management responsibilities and no liabilities in the firm other then his total investment

Answer 38

Limited Partner

Question 39

one who obligates himself to pay the debts of another, a cosigner

Answer 39

Surety

Question 40

agreeing to pay the debt of another person if he does not pay it

Answer 40

Cosigning

Question 41

shares or portions of ownership in a corporation

Answer 41

Stock

Question 42

a distribution of a portion of the corporation's profits

Answer 42

Dividends

Question 43

the most well-known American stock index

Answer 43

DIJA; Dow Jones Industrial Average

Question 44

the largest exchange that does not have a trading floor

Answer 44

NASDAQ; National Association of Securities Dealers Automated Quotations

Question 45

privately managed stock portfolios

Answer 45

Mutual Funds

Question 46

a collection of stocks from different individual corporations

Answer 46

Stock Portfolio

Question 47

stock prices rising in an industry or access the entire market simply because of expectations and rising in excess of the corporations' true value

Answer 47

Speculative Bubble

Question 48

a governmental agency founded to ensure that corporations provide accurate and current info to the public about their financial situations and business dealings

Answer 48

SEC; Securities and Exchange Commission

Question 49

the most well-known and reputable stock market in the world

Answer 49

NYSE; New York Stock Exchange

Question 50

arrangements people have developed for trading with one another

Answer 50

Market

Question 51

a cooperative institution that pools the savings of its members and makes consumer loans available to them

Answer 51

Credit Union

Question 52

money that is not backed by anything of value but serves as money because of governmental decree

Answer 52

Fiat Money

Question 53

a financial institution designed to collect savings and use that capital to make loans

Answer 53

Savings and Loan; S & L

Question 54

the governmental institution that serves as the central bank of the United States

Answer 54

Federal Reserve System

Question 55

a money supply that can be expanded or contracted

Answer 55

Elastic Currency

Question 56

if a state bank does not choose to join the FRS but desires to be insured, it falls under the regulation of the _____

Answer 56

FDIC; Federal Deposit Insurance Corporation

Question 57

the total dollar value of all final goods and services produced by a nation in one year

Answer 57

(GDP) Gross Domestic Product

Question 58

a tax on an imported product

Answer 58

Tariff

Question 59

a condition in which governments do not impose trade legislation and people are free to buy and sell products regardless of the nation that produced them

Answer 59

Free Trade

Question 60

a government's payment to a producer to help with manufacturing costs

Answer 60

Subsidy

Question 61

that part of the business cycle which rapid expansion comes to a halt as shortages in natural resources, high wages, low unemployment, and rising interest rates continue to create higher prices for consumers

Answer 61

Peak Phase

Question 62

a severe and prolonged trough phase of the business cycle

Answer 62

Depression

Question 63

those workers who have a job but earn insufficient income for them to be able to provide a living for themselves

Answer 63

Underemployed

Question 64

that part of the business cycle in which consumer purchases decline and underemployment increases

Answer 64

Recession Phase

Question 65

What are the seven baby steps?

Answer 65

1. $1,000 in an emergency fund ($500 if income is under $20,000 per year) 2. Pay off all debt except the house utilizing debt snowball 3. 3-6 months expenses in savings 4. interest 15% of your household income into Roth IRA's and pre-tax retirement plans 5. College funding 6. Pay off home early 7. Build wealth and give