Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
47 Cards in this Set
- Front
- Back
The U.S.'s main Problem? |
Scarcity: a limited amount of resources and and unlimited amount of wants/desires |
|
4 Factors of Production |
1.land: locations 2.labor: skills, work 3.capital: items needed 4.entrepreneurship: ideas, methods |
|
Opportunity Cost |
Giving one thing in order to get something else. EX: 1/12 mower OC = 1 car & 1 car OC = 12 mowers |
|
Points on Production Possibilities Curve "PPC" |
On = maximum efficiency Inside = inefficient; unemployed or underemployed Outside = unattainable; impossible |
|
Graphs PPC |
Constant: strait line downwards from left to right Increasing: Slope, bowed, bent downward for L to R |
|
Underemployment |
working a job that is below your skill level EX: college graduate working at Wegmans |
|
Macro vs. Microeconomics |
macro- The big picture, looking at the whole economy of the U.S. micro- Narrowed focus; looking at a specific area, product, business |
|
Gross Domestic Product (GDP) |
form of measuring the economic state; C+I+G+(X-M) C= consumption I= investments G= government spending X= exports M= imports |
|
Human Capital |
investments made in workers by their employers; providing training to employees to increase skill level for greater production |
|
3 Forms of Business Ownership |
1.proprietorship: 1 owner, ~72% begin this way, make up for ~6% of total sales 2.partnership: at least 2 owners, ~8% begin this way, make up for ~13% of total sales 3.corporation: a group of people recognized as one entity (business, firm), ~20% begin this way, make up 81% of total sales |
|
Factor Market |
where resources/ factors of productions are bought and sold |
|
Product Market |
where all finished goods are bought and sold |
|
Circular flow |
Market transactions involving and exchange of money for goods (product) or resources (factors) |
|
Determinants of Demand |
1.taste 2.income 3.other goods 4.expectations 5.# of buyers |
|
Determinants of Supply |
1.factor costs 2.technology 3.profitability of other options 4.expectations 5.# of sellers |
|
Shifts (Demand Curve) |
demonstrates a change in DEMAND; change caused by anything other than a price change. Whole curve moves on graph |
|
Movement (Demand Curve) |
demonstrates a change in QUANTITY DEMAND; caused only by price change. Points move up or down the original curve |
|
Equilibrium |
The only time buyers & sellers are happy. Point where quantity supplied is equal with quantity demanded |
|
Surplus |
price floors cause; Not enough demand, too much supplied |
|
Shortage |
price ceilings cause; Too much demand, not enough supplied |
|
Free Rider |
someone who directly benefits from another persons purchase/consumption of a public good. EX: donations for public issue |
|
Externalities |
cost or benefit that a 3rd party recieves EX: Fence, traffic |
|
Private Vs. Public good |
private- the consumption by one person, excludes the consumption by others (MY car) public- The consumption by one person does NOT exclude the consumption by others (highways) |
|
Transfer Payments |
income that is provided to people who do not exchange any goods or services (work) in return. is an ATTEMPT to correct inequity. ex: s.s., veterans, unemplyment |
|
Types of taxation |
1.progressive: pay more as you earn more ex: federal income tax 2. proportional (FLAT): constantly paying the same rate. ex: State sales tax 3. regressive: pay less as you earn more. ex: s.s. tax beyond the ceiling |
|
Largest sources of tax revenue |
Federal: 1-personal income tax, 2-s.s. tax State: sales tax Local/Cities: property taxes |
|
Cost-Benefit Analysis |
Projects are more desirable as long as the benefit exceeds the costs "marginal" change in, diff between 1 part cost- what you give benefit- what you recieve |
|
GDP per Capita |
Must have population size Must be Like-numbers Billions to Millions- 3 decimals points to the RIGHT. Both become millions than DIVIDE GDP by population size |
|
GDP= C+I+G+(X-M) - depreciation (C.C.A)= |
NDP (Net Domestic Product) |
|
NDP -IBT (indirect business tax) = |
NI (National Income) |
|
Intermediate goods |
goods that are bought for the purpose of using them as part of the final product of another good. ex: goodyear tires and toyota vehicles |
|
underground economy (definitions and types w/ex) |
Definition: unreported income, "off the books", untaxed income 1. Illegal- drug dealers, prostitutes, bookies 2. Legal- babysitters, painters, lawn mowing |
|
depreciation |
the gradual wearing out of something over time, lessening the value. Capital Consumption Allowance (C.C.A) |
|
Disposable Income |
personal income- personal taxes You can only Consume or SAVE your income. |
|
Labor Force |
All persons who are 16+ that are currently working, or are actively seeking paid employment |
|
Labor Force Participation Rate |
Labor Force / total population |
|
# of people unemployed |
unemployment rate (5%) X labor force |
|
# people employed |
Labor Force - # people unemployed |
|
How many MORE people need jobs? |
Full employment Rate (98%) X Labor Force - # people employed |
|
Discouraged Workers |
frustrated job seekers; people who would work but are no longer actively seeking *do not count, but should.* **UNDERSTATE unemployment stats** |
|
Phantom Unemployed |
LIARS; people who claim to be actively seeking employment, but would not actually work when given the opportunity. *do count, but should not.* **OVERSTATE unemployment stats** |
|
Seasonal unemployment |
no work due to changes in season. ex: raft guides, oc waitress |
|
Frictional unemployment |
in between jobs, quitting one job before having another one |
|
Structural unemployment |
no work dues to a skills gab, change in technique of job |
|
Cyclical unemployment (AD) |
unemployed due to lack of aggregate demand, bad economic state. ex: bad economy, no new houses, builders not needed |
|
Full Employment |
the Lowest Level of unemployment Acceptable. DOE NOT mean all persons have a job; allows room for frictional unemployment 4, 5, 6% |
|
Physical and Institutional Production Possibilities |
PPP- production IF ALL people resources & people used IPP- Production with all AVAILABLE resources, technology, social constraints ** IPP is ALWAYS INSIDE the PPP* |