Final Exam Review Flashcards
(124 cards)
1
Q
Economics is the study of what?
A
The study of the choices that individuals and societies make in the production, distribution, and consumption of goods.
2
Q
What is an economy?
A
Any system for the production, distribution, and consumption of goods and services.
3
Q
The economic system in Plymouth called Common Course and Condition is a form of _____.
A
Communism
4
Q
What is macroeconomics?
A
The study of national and international economies and how these major economies are affected by large scale choices and public policies.
5
Q
What is microeconomics?
A
The study of specific components within a major economy and how the choices made by individuals, households, and businesses affect that economy.
6
Q
What is a tangible item that people want and for which they will pay?
A
Good
7
Q
What are intangible goods produced by labor for which people expect to pay?
A
Services
8
Q
What is a human desire?
A
Want
9
Q
What is a mechanism that allows people to exchange goods?
A
a Market
10
Q
What is the quantity of a good for sale at a certain price under certain conditions?
A
Supply
11
Q
What is the amount of a good that is bought at a certain price under certain conditions?
A
Demand
12
Q
Who are the people who provide goods?
A
Producers
13
Q
Who are the people who use goods?
A
Consumers
14
Q
What is the first thing to understand about economics?
A
All goods have to be worked for.
15
Q
What is the bad habit of spending more than one can afford?
A
Prodigality
16
Q
What is a necessity, or something that would be difficult to do without?
A
Need
17
Q
What are the general rules or principle guiding the production distribution and consumption of goods?
A
Law of Economics
18
Q
From early in the 16th century until the 18th century the principle states Europe followed what set of economics policies?
A
Mercantilism
19
Q
What are taxes that government applies only to imported goods?
A
Tariffs
20
Q
What is the difference in the value of goods that a country sells abroad compared to those it purchases from other countries?
A
Trade Balance
21
Q
What Economics policy established colonies and extensive territories created to benefit their mother country?
A
Imperialism
22
Q
Who were the French economists that favored the natural economy opposed to the artificial?
A
Physiocrats
23
Q
What is the French phrase that means let things alone?
A
laissez-faire
24
Q
Who is the founder of modern economics?
A
Adam Smith
25
Who wrote the wealth of nations?
Adam Smith
26
What is the separation of work into individualized tasks?
division of labor
27
What does "invisible" hand mean?
brought together
28
What is the division of labor that allows the production of goods by workers doing the jobs they do best?
specialization
29
What is the term for economic success?
prosperity
30
What is the value of all things that people own?
wealth
31
What is the human activity which results in the creation of goods and services?
Labor
32
Goods that last less than 3 years are called?
Nondurable goods
33
Goods that last at least 3 years are called?
Durable goods
34
Who determines what goods are to be produced and in what quantity in a free market economy?
The Consumer
35
What is a system that gives people only limited choices regarding what to produce and consume?
Traditional Market Economy
36
What is the alternative, illegal system for exchanging goods to avoid governmental regulations?
Black Market
37
What part of an economy is controlled by private individuals, businesses, and organizations?
Private Sector
38
What part of an economy is controlled by national, state, and local governments?
Public Sector
39
What is the desire to work to improve one's economic situation?
Profit Motive
40
The diminishing of the value of goods that is caused by wear and time is known as what?
Depreciation
41
What is the excess of the total revenue paid by buyers for goods over the seller's total expense of producing these goods?
Profit
42
what indicates that people tend to substitute less expensive goods for ones whose prices have risen?
substitution effect
43
The cost of labor, and what it would cost people who run their own establishments to hire managers to run the business for them is called the _____ __ ________.
Wage of Management
44
What is the total value of a business minus any liabilities?
Equity
45
What is the quality of producing goods efficiently with a minimum of waste?
Efficiency
46
There are only ___ ways to improve efficiency.
Two
47
what is the value that is directly related to the benefits their owners receive through their use?
value in use
48
what a particular good is worth in exchange for some other good is what?
value in exchange
49
what is the amount of money that a buyer pays the seller for a particular item?
price
50
what are prices at which goods can be sold in an open market with many potential sellers and buyers?
market prices
51
what is the amount of satisfaction that results from a one unit increase of a product?
marginal utility
52
what states that as ones supply of a specific good or service increase, the satisfaction derived from each additional unit tends to decrease?
diminishing marginal utility
53
what is the total amount of satisfaction received for possessing a particular amount of good?
total unity
54
what explains the inverse relationship between the price of a good and the amount that people choose to buy?
law of demand
55
what says that when the price of a good falls, consumers tend to buy more of that good or of other items because they can do so without giving up anything?
income effect
56
what indicates that people tend to substitute less expensive goods for ones whos prices have risen?
substitution effect
57
what is the list of numbers that compare price with quantity demanded?
demand schedule
58
What is the sum of all of the factors of production used in making goods.
Total Cost
59
What is the sum cost of all the factors of production used in producing ONE unit of a good?
Average Cost
60
It is _______ _____ that creates the wealth of nations.
Intelligent Work
61
The 3 qualities of mass production are:
1. division of labor
2. standardization of parts
3. automatic conveyance
62
What is the ability of one entity to produce goods or provide services more efficiently than his competitors when given the same resources?
Absolute Advantage
63
What is the ability of an entity to produce a good or service at an opportunity cost that is lower than that of another produce.
Comparative Advantage
64
What is the production of goods in which a country or region has absolute or comparative advantage?
Geographic Specialization
65
The theory that domestic manufacturers need government protection against foreign competitors is known as __________.
Protectionism
66
what is the graphic representation of the quantity of goods purchased at different prices?
demand curve
67
What law states the direct relationship between the price of a good and the amount that suppliers make available?
The Law of Supply
68
What is a list of numbers that compares price with quantity supplied?
Supply Schedule
69
What is a graphic representation of the quantity of goods supplied at different prices?
Supply Curve
70
What phenomenon describes how people will buy less as prices go up?
Price Elasticity of Demand
71
What are price levels set above equilibrium prices?
Price Floor
72
A _____ is when the government places a limit on how high a producer may charge for his product.
Price Ceiling
73
Who was the main advocate of the Principal of Comparative Advantages?
David Ricardo
74
What are groups of firms that produce similar products or provide similar services??
Industries
75
What is the situation that arises when a single firm is the only supplier of a good for which no substitute exists?
a Monopoly
76
What is the difference between a monopoly and a legal monopoly?
A monopoly is illegal, but a legal monopoly is when the government lets a business have a monopoly to encourage production.
77
What kind of monopoly occurs when a single firm can fill the demand for a good more efficiently than if there were multiple firms in the industry?
a Natural Monopoly
78
What is it called when each firm promotes a differentiated product?
Monopolistic Competition
79
What kind of market is one in which each firm promotes a differentiated product?
Monopolistic Competition
80
What is a market that occurs when an industry is dominated by only a few firms?
Oligopoly
81
What is it called when companies get together to set unnecessarily high prices?
a Collusion
82
What is a collusion of businesses which join together to restrict or eliminate competition?
a Trust
83
What is anything that is generally accepted as a means of payment?
Money
84
What are the 3 principal purposes that money functions as?
1. To be a medium of exchange
2. To provide a measure of value
3. To provide a store of value
85
What is coined, metallic money?
Specie
86
What is the asserted face value?
Face Value
87
When the level of prices in the market rises because too much money is in circulation?
Inflation
88
If prices decrease because money seems more valuable and stable?
Deflation
89
A system which allows banks to hold less than 100% of deposits in reserve is what?
Fractional Reserve Banking
90
What is legal tender that is backed by nothing but a government's promise?
Fiat Money
91
What does M1 include?
Transaction accounts, (checking accounts, money market accounts, etc.), and traveler's checks and all coins and currency.
92
What does M2 include?
M1 and non-checkable savings deposit, money market mutual funds and similar deposits, and time deposits worth less than $100,000
93
What is selling the same type of goods at different prices to different buyers?
Price Discrimination
94
What is the quantity of producing effectively with a minimum of waste?
Efficiency
95
What is the total amount invested in the production of a good?
Input
96
What is the total amount of a good that is produced?
Output
97
What is the commitment of resources to a project or purpose that is expected to bring future profit to the investor?
Investment
98
What is a debtor?
One who borrows money or capital.
99
What is a creditor?
One who lends money or capital.
100
What does M3 include
M1 and M2 and time deposits over $100,000
101
What is a period, usually six months or longer, during which the economy recedes or declines?
Recession
102
What is the theory that the variation in the money supply is the main source of economic fluctuations?
Monetarism
103
What is an account that guarantees a certain interest rate and has a specified maturity date?
CD (Certificate of Deposit)
104
What is an account that allows limited transactions and pays an interest rate that changes with the demand for loans?
Money Market Account
105
What is a contract between two parties in which one party protects the other against certain types of loss in exchange for payments called premiums?
Insurance
106
What is an arrangement provided by an individual's employer for the intent of providing for the employee's retirement from work?
Pension Plan
107
What is the resources corporations gather by selling ownership in their businesses?
Stocks
108
What is a legal entity which is distinct from the people who own it?
Corporation
109
What is equal portions of a corporation's stock?
Shares
110
If a corporation fails or declares bankruptcy, the individual stockholders do not personally have to pay the firm's creditors. This is called what?
Limited Liability
111
What is shares of a corporation's profit?
Dividends
112
What is a document that guarantees the bondholder the amount of his original investment plus a specified rate of interest by a certain date?
Bond
113
What are assets that flow easily since they can be converted into other investments or cash without much time or difficulty?
Liquid Investments
114
What is an established system of political administration by which a nation, state, society, or organization is ruled?
Government
115
What is an economic system based upon collective ownership and control of natural resources?
Socialism
116
What are are 5 government practices that have harmed economic systems over the centuries?
1. Excessive Taxation
2. Inflation and Debasement of Money
3. Excessive Public Expenditure
4. Excessive Regulation and Direction of the Economy
5. Political Plundering of the Economy
117
What are large, complex organizations made up of appointed officials and their numerous agencies and departments?
Bureaucracies
118
Who was the founder of the Keynesian school of Economics?
John Maynard Keynes
119
What is the belief that a society's economic problems can be better solved by "expert planners" than by the natural, automatic corrections made by a free market?
Keynesianism
120
What are the recurrent fluctuations in the level of economic activity form that economists call?
Business Call
121
What is the value of all finished goods and services produced within a country during a year's time.
Gross Domestic Product (GDP)
122
What is the high point of the business cycle called?
Peak
123
What is the low point of the business cycle called?
Trough
124
What is a boom in the business cycle?
Recession
