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67 Cards in this Set
- Front
- Back
which type of business usually have no competition?
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public utilities
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corporations involved in different steps of manufacturing or marketing that merge
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vertical merger
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what are the factors of production
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land, labor, capital, entrepreneurs
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what are the characteristics of a market economy
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individual freedoms, consumers decide what is produced, does not provide for everyones basic needs, adjusts to change gradual
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what are benefits of entrepreneurship?
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increased competition, higher profits, more and better paying jobs, healthy tax revenues
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what model is used to ilustrate the concept of opportunity cost?
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production possibilities curve
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who is regarded as a risk-taker in the economy in search of profits?
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entreprenuers
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corporations that produce the same kind of product that merge
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horizontal mergers
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define economics
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study of efforts to satisfy unlimited wants with scare resources
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what are the characteristics of free enterprise economy?
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voluntary exchange
competition profit motive private property economic freedom |
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in what type of economy is competition allowed to flourish with minimal government intervention?
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free enterprise
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define trade-offs
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alternative choices by consumers in the market place
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A firm that has at least four businesses, each making unrelated products, none of which is responsible for a majority of its sales
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conglomerate
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define partnership
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business jointly owned by two or more persons
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define inflation
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rise in the general level or prices
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define scarcity
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limited resources with unlimited wants
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Type of economic system in which people and firms act in their own best interests to answer the WHAT, HOW, and FOR WHOM, questions
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market economy
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Define economic system
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organized way a society provides for the wants and needs of its people
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define want
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way of expressing a need
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define nondurable good
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item that lasts for less than three years
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define voluntary exchange
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when buyers and sellers freely and willingly enter into transactions
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the next best alternative use of money, time, or resources when one choice is made rather than another
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opportunity cost
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define capital
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tools, equipment and factories used in the production of goods and services, one of four factors of production
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define multinational
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company with manufacturing or service operators in 2 or more countries
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define corporation
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form of business organization recognized by law as separate legal entity with all the rights and responsibilities of an individual, including the rights to buy and sell property, enter into legal countries, sue and be sued
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what is the substitution effect
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the act of a consumer replacing one item with another less costly item
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what are the conditions of a healthy market
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- buyers and sellers are well informed
-adequate |
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what is a market failure?
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-rising insurance costs due to uninsured motorist
-overcrowded highways |
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costs for electricity, natural gas, and labor are examples of..
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variable costs
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market failure can occur when
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resources do not move from industry to industry
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variable cost
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changes costs that occur when output increases or decreases
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diminishing marginal utility
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decline in the satisfaction received by using an additional quality of a product
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production function
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relationship between changes in output to different amounts of a single input when other inputs do not change
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monopolistic competition
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market structure like perfect competition but which allows for product differentiation
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demand
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ability and willingness to buy a product as well as desire for it
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oligopoly
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market dominated by a few large firms
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equilibrium price
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price that leaves neither a surplus nor a shortage
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income effect
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change in demand due to a change in price of a product that alters the consumers real income
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externality
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effect that an economic activity has on a third party
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price ceiling
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highest price that can be legally charged for a product
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substitution effect
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demand for 1 product changes because of a change in the price or another product
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monopoly
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market has only one seller of a product
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laissez-faire
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theory that government should not interfere with business
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supply elasticity
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measure of how changes in price affect the supply of a product
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microeconomics
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model or economic behavior and decision making by individuals and businesses
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fixed costs
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business costs that do not change even if the plant is idle
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market equilibrium
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condition characterized by stable prices and product supplied equal quantity demanded
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marginal utility
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degree of usefulness received from each additional unit of a product
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public disclosure
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requirement that businesses must provide certain information to the public
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price floor
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lowest legal price
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what are the functions of money
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store of value, measure of value, medium of exchange
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true or false-
a ''mutual coincidence of wants'' is difficult to achieve in a barter economy. |
true. (moneyless economy)
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early colonist in Virginia used tobacco as what form of money?
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commodity money
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what is the origin of the American dollar?
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the spanish peso and the austrian taler
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what traits should ''money'' have in order to be successful medium of exchange
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durable, portable, easily divisible
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what is the current monetary standard under which the United States operates
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the inconvertible fiat money standard
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is the federal reserve system controlled by the public or the federal government
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public
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what federal agency insure bank deposits in the even of a bank failure?
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FDIC (Federal Deposit Insurance Corporation)
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what groups advises the Fed on the growth of the money supply and the level of interest rates?
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FOMC (Federal Open Market Committee)
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what are the tools used by the Fed to conduct monetary policy?
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reserve requirement discount
rate margin requirements open market operations selective credit controls |
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property used as security for a loan is
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collateral
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a person who leans money to another person is a
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creditor
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the owner of shares in a corporations is a
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stockholder
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which of the following type of investments carries the highest level of risk?
A. a mattress B. savings account C. checking account D. certificate of deposit |
A. a mattress
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which of the following is NOT important in saving and investing?
a. amount saved b. saving early c. amount of time d. financial institution |
D. financial institution
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the price paid to use another's money is called
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interest
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a person obligated to pay the debt if another fails to pay is a
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co-signer
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