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Flashcards in Test 7 Deck (90):
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Pure Competition

Industry made up of many small businesses

1

Four Characteristics of Pure Competition

1. Many buyers and sellers
2. Identical goods or services are offered for sale
3. No buyer or seller knows more than any other about the market
4. Buyers and sellers are able to enter or exit the market at will

2

How many buyers and sellers are in Pure Competition?

Enough that no individual can influence the market

3

Monopolistic Competition

A market where many firms are selling similar, but not identical, products

4

Three Characteristics of Monopolistic Competition

1. Many buyers and sellers
2. Products are slightly different
3. It is easy to enter or exit the market

5

Oligopoly

A market dominated by a few large firms

6

Characteristics of Oligopoly

1. There are few sellers
2. They produce and sell either identical or slightly different products
3. There are significant barriers to entry (difficult to enter the market)

7

Barriers to Entry

Anything that prohibits a firm from entering the market

8

Examples of Barriers to Entry

1. Legal Barriers
2. Extremely low average total costs
3. Exclusive ownership of a scarce resource

9

Example of Legal Barriers

1. Public Franchise
2. Patent
3. Copyright

10

Public Franchise

A right granted to a firm by the government that permits that firm to provide a particular good or service, and excludes all others

11

Patent

A monopoly to use a new product or idea exclusively for 17 years

12

Copyright

The exclusive right of authors of original writings and artistic works to sell or in any way reproduce their work for their lifetime plus several more decades

13

Monopoly

A market where there is only one seller

14

Characteristics of Monopoly

1. There is no close substitute for the product
2. The high cost of entry prohibits other companies from entering

15

Sherman Anti-Trust Act does what

Outlaws monopolies

16

Legal Monopolies

1. Public Utilities
2. Patent
3. Copyright
4. Trademarks

17

Trademark

A special design, name, or symbol that identifies a product, service, or company

18

Trust

A business combination where management and control of the member corporations are vested in a single Board of Trustees who are able to control a market, absorb or eliminate competition, fix prices, ect.
(Trusts are illegal)

19

Pool

An agreement to divide business and share the profits
(Illegal)

20

Interlocking Directorate

Where some of the same people serve on multiple Boards of Directors and they run all of these companies as the same company
(Illegal)

21

Stock Watering

Where they lie about a companies profits
(Illegal)

22

What is the purpose of Stock Watering

To sell stock of your company

23

Holding Company

A corporation that is organized to hold the bonds or stock of other corporations
(Legal)

24

Merger

A combination of two or more companies into one

25

What happens after the merger

The acquired firm is either dissolved or becomes a division of the combined new firm

26

Why do they have mergers?

1. To add new products
2. To benefit from increased size
3. To reduce or eliminate competition
4. To reduce costs

27

Type of Mergers

1. Horizontal Merger
2. Vertical Merger
3. Conglomerate Merger

28

Horizontal Merger

A combination of two or more companies engaged in the same business

29

Vertical Merger

A combination of two or more companies involved in different steps of the same production process

30

Conglomerate Merger

A combination of two or more unrelated businesses

31

Sherman Anti-Trust Act

Prohibits any business combination that is in restraint of trade

32

Clayton Anti-Trust Act

Specified what acts were in restraint of trade

33

Federal Trade Commission Act

1. Sets up the Federal Trade Commission
2. Prevents misleading advertising and other unfair business practices

34

Celler-KeFauver Anti-Merger Act

Declares mergers to be illegal where they serve to lessen competition or tend to create monopoly

35

Types of Workers

1. White collar
2. Blue collar

36

Differences Between White and Blue Collar

Blue collar does more physical labor
White collar might make more money

37

Types of Blue Collar Workers

1. Skilled
2. Unskilled

38

Skilled Labor

Have training

39

Unskilled Labor

Not trained

40

Are there more skilled or unskilled workers?

Unskilled

41

Labor Union

An organization that seeks to increase the wages and improve the working conditions of its members

42

Why Do People Join Labor Unions?

1. Higher wages
2. Better hours
3. Safety/working conditions
4. Job security
5. Legal protection/benefits

43

Types of Labor Unions

1. Craft Union
2. Industrial Union

44

Craft Union

A union organized to include workers with a specific set of skills or occupations regardless of where or what industry they are employed

45

Industrial Union

A union organized to include all workers in an industry regardless of skills

46

Open Shop

Union membership may never be required as a condition of employment
TN is a open shop state

47

Closed Shop

Union membership is a condition of initial employment
Illegal

48

Union Shop

Union membership may not be required of initial employment, but after a certain period of time Union membership may be required to keep the job

49

Biggest weapon that a Labor Union can use?

Strike

50

Strike

Work stoppage

51

Purpose of Strikes?

Put pressure on the employer

52

Picket

Standing outside the factory with signs

53

Purpose of Picket Line

1. To draw attention
2. To discourage business
3. Stop strike breakers

54

Strike Breakers

Substitute workers to take over for the strikers

55

Types of Strikes

1. Jurisdictional Strike
2. Secondary Strike

56

Jurisdictional Strike

A strike that involves one company and two labor unions

57

Secondary Strike

A strike that involves two companies and one labor union

58

How does a Jurisdictional Strike work?

A union goes on strike against a company because of grievances against another labor union in order to get concessions from a company

59

How does a Secondary Strike work?

A labor union goes on strike against a company, which it has no grievances with, in order to force it to put pressure on a company that it does have grievances with

60

Management Weapons Against Labor Unions

1. Yellow Dog Contract
2. Blacklisting
3. Lockout
4. Strike Breaker
5. Scab

61

Yellow Dog Contract

In order to be hired, you must pledge to not join a labor union
(Illegal)

62

Blacklisting

Employers prevent fired employees by giving a list with their name to other companies
(Illegal)

63

Lockout

Management closes the business in order to put pressure on the workers
(Illegal)

64

Strike Breaker

Someone who comes in and works while the labor union members are on strike

65

Scab

Worker that is paid to spy on other workers

66

First National Labor Union

National Labor Union

67

Leader of National Labor Union

Sylvias

68

2nd National Labor Union

Knights of Labor

69

Leader of Knights of Labor

Uriah Stephens

70

How is Knights of Labor different?

Included:
All races
Both genders
Skilled and unskilled

71

What labor union was founded after these died out?

American Federation Union

72

Leader of the American Federation of Labor

Samuel Gompers

73

Leader of American Railway Union

Eugene Debbs

74

Who could be in the American Railway Union

Anyone who works in the railways

75

Congress of Industrial Organizations (Labor Union) was formed by who

John Lewis

76

Leader of AFL-CIO (American Federation of Labor-Congress of Industrial Organizations)

George Meany

77

What happened to AFL-CIO

It became the largest labor union

78

Conspiracy Doctrine

An individual worker has the right to make demands of an employer but when two or more worker ban together it becomes an illegal conspiracy

79

Commonwealth vs. Hunt

Labor unions are legal

80

Clayton Act

Excludes the labor unions from anti-trust laws

81

Norris-LaGuardia Act

Outlaws Yellow Dog Contracts

82

Wagner Act

1. Guarantees a workers right to join a labor union and collective bargain
2. Made it illegal to discriminate against labor union workers

83

Fair Labor Standards Act

Provides for a minimum wage and anything beyond 40 hours a week, you have to be paid .5x extra

84

Taft-Harley Act

1. Outlaws Closed Shop
2. Gives the states the authority to pass Right to Work Laws (open shop)

85

Landrum-Griffin Act

Purpose was to reduce corruption in labor unions
The embezzlement of union funds becomes a federal offense
Union election would use the secret ballot

86

Civil Rights Act

Prohibits discrimination in hiring, firing, and promotions on the basis of race, color, religion, gender, or national origin

87

Arbitration

Involved a third party known as the arbitrator to solve problems
Each side presents their case to the arbitrator
The arbitrator will then hand down a legally binding decision which can only be overturned through the courts

88

Mediation

Involves a third party known as the mediator
Each side presents their case to the mediator
The mediator then tries to get both sides to reach an agreement
(not legally binding)

89

Conciliation

Involves a third party that is chosen
Third party tries to get both sides to negotiate
Third party is not actively involved in the negotiation (unlike mediation)