Shared Flashcard Set

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Economics
Basic concepts
34
Business
10th Grade
01/26/2010

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Cards

Term
Scarcity
Definition
Not having enough resources to satisfy every need.
Term
Economic Decision Making
Definition
The process of choosing which wants/needs will be satisfied.
Term
Trade-off
Definition
The next best alternative. The thing you give up to choose something else.
Term
Opportunity Cost
Definition
The value of the next best alternative.
Term
Decision Making Process
Definition

1. Define the problem

2. Identify your choices

3. Evaluate the adv. and disadv. of each choice

4. Act on your choice

5. Review your choice

Term
3 Economic Questions
Definition

1. What will be produced?

2. How will it be produced?

3. What wants/needs will be satisfied?

Term
Economic System
Definition
A nation's plan for answering the three economic questions.
Term
Command Economy
Definition

1.Government owns and controls resources

2. Government assigns jobs to consumers

Government producess food, vehicles, house, and products

3.Personal economic freedom is limited

 

Term
Market Economy
Definition

1. Individuals have more freedom

2. Consumers vote for products

3. Business chooses consumer's wants/needs

 

Term
Mixed Economy
Definition
A combination of a command and a market economy.
Term
Social Services
Definition
Increase gov't involvment. Prices are low for everyone. High taxes and employment for many.
Term
Communism
Definition

 1.Almost total gov't control or complete, totalitarianism

2.One political party

3.Little employment.

4.Little to no economic freedon.

Term
Capitalism
Definition

1. Private ownership of businesses

2. Limited social services

3. Marketplace competition

4. Multiple political parties

5. Democracy

Term
Need
Definition
Something necessary for survival
Term
Want
Definition
Desires that can be satisfied by consuming a good or service
Term
Goods
Definition
Tangible, touchable, physical
Term
Services
Definition
Intangible. (police, fire department)
Term
Economic Resources
Definition
Means by which goods and services are produced (Four Factors of Production)
Term
Four Factors of Production
Definition

1. Land - trees, fish, bark, lake

2. Labor - anyone that works in the economy

3. Capital - Machienery used in production of goods, money

4. Entrepreneurship - people willing to risk time and money to run a business. Competition!

Term
Competition
Definition
the struggle between customers or companies
Term
Profit
Definition
money earned from conducting business after all costs and expenses have been paid
Term
Supply
Definition
amount of goods producers are willing to make and sell
Term
Demand
Definition
customer willingness and ability to buy products
Term
Equillibrium Point
Definition
point intersects in chart. Amount of money supply is equal to the demand
Term
Surplus
Definition
supply exceeds demand {sale}
Term
Shortage
Definition
Demand exceeds supply
Term
Business Cycles
Definition
movement of economy from one condition to the other and back again
Term
4 Business Cycles
Definition

1. Prosperity - GDP is high, shortage of jobs

2. Recession - economy begins to slow (8-10yrs). 2 quarters of economic downturn.

3. Depression - deeper recession

4. Recovery - economic improvement

Term
Inflation
Definition

an increase in the general level of prices. (most harmful on elderly/fixed incomes)

60's - 1-3%

70's-80's - 10-12%

90's-present - 2-4%

 

Term
Deflation
Definition

decrease in the general level of prices

'29-'33 - prices declined 25%

Term
CPI (Comsumer Price Index)
Definition
A number that compares one year with some earlier base year
Term
Interest
Definition

the price of the use of another's money

rates lower = savings and investments

rates higher = borrowing money

Term
Law of Demand
Definition
the higher the price, the lower the quantity demanded
Term
Law of Supply
Definition
 the higher the price, the higher the quantity supplied
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