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| The common-sense science of how and why people, businesses, and governments make the choices they do |
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| Everyone has unlimited wants |
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| Means everything is finite, or limited in quantity |
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| Any tangible (physical) thing that has a measurable life span |
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| Asks the question of which one has more economic value-diamonds or a glass of water |
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| The usefulness for the buyer |
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| The principle stating that a thing is valuable because of the nature of the product such as its scarcity or the amount of labor that went into its production |
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| The principle stating that the worth of everything is determined by its usefulness to the buyer |
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| an imaginary unit of satisfaction |
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| concerns itself with choices made by individual units |
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| concerned with large scale economic choices and issues |
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| the approach of observing economic choices and predicting economic events |
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| makes value judgments about existing or proposed economic policies |
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| founder of the Austrian School of Economics |
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| developed the Principle of Diminishing Marginal Utility |
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| Champion of the Market Price System |
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| states that the lower the price charged for a good or service, the greater the quantity people will demand and vice versa |
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| goods that the demand increases for a good because the buyer's income goes up |
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| goods that experience a decline in popularity as buyer's incomes increase |
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| holds that the higher the price buyers are willing to pay, the greater the quantity of the product a supplier will produce |
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| 3 factors are changes in technology, changes in production costs, and changes in the price of related goods |
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| an excess of unsold products |
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| a barrier preventing the price from falling lower |
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| prevent prices from rising to the equlibrium market price |
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| caused by the price of a good being held lower than its market equilibrium price |
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| a simplification of how factors in our environment affect our choices |
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| the total of all households' expenditures |
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| the natural resources that go into the production of goods |
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| all human effort that goes into the creation of goods and services |
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| all the money loaned directly to the business firms from the household sector |
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| the activity of creatively combining natural resources, human labor, and financial capital to develop new and useful products and services |
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| all payments for the use of an owner's property |
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| all payments for labor used to produce goods and services |
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| the payment business firms make on borrowed money |
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| the rewards entrepreneurs receive for successful risk taking |
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| when money is withdrawn from an account or borrowed |
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| goods that are purchased for personal use |
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| goods that are used to produce consumer goods |
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| a business firm that uses a great deal of human labor relative to real capital |
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| uses relatively more automated equipment |
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| when ruling monarchs had but one economic goal- to increase their holdings of gold and silver |
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| Father of Laissez-Faire Economics |
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| capitalism in its most extreme form |
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| classic liberal capitalism |
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| the form of capitalism envisioned by Adam Smith |
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| classic liberal capitalism |
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| accepts the idea that government must exist but allows it only minimal ownership of resources and decision-making power |
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| goods and services that are impossible for private firms to create a profit |
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| the majority of natural resources, financial capital, and labor is owned by private citizens, but the government intervenes widely in the decision-making process |
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| a business firm that is owned by one person |
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| most popular form of business in America today |
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| a business enterprise owned by two or more people and the least popular form of business |
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| one in which there is at least one general partner who has unlimited personal financial liability and at least one limited partner |
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| one who obligates himself to pay the debts of another |
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| a separate entity created by the law |
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| the business type that pays high taxes |
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| shares or portions of ownership in a corporation |
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| the arrangements that people have developed for trading with one another |
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| families of common concerns that produce their products in a similar way |
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| exists when there is a very large number of sellers who are selling an identical product |
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| Businessman and Philanthropist |
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| the most prevalent form of competition that exists when there are many sellers of slightly differentiated goods |
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| a form of market organization in which there is only one supplier in the industry. "one seller" |
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| a monopoly that exists because one firm owns 100% of some resource vital to the industry |
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| exists because the government has allowed the firm an exclusive right to provide the good or service |
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| when a group of companies would eliminate their competition by putting their stock into this single account |
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| prohibited interlocking directorates, tying contracts, anticompetitive takeovers, and price discrimination |
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| the exchange of one person's goods or services for another's |
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| anything that is commonly used and generally accepted in payment for goods and services |
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| double coincidence of wants |
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| both parties involved in the trade wanting what the other has to offer |
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| convenience and portability, divisibility, durability, and stability |
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| characteristics of money (4) |
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| means of payment, measure of value, and means of storing purchasing power |
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| one in which some single commonly used good is selected to be the economy's medium of exchange |
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| a coin that contains a quantity of metal less than its face value |
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| money that represents some commodity held in store |
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| money that is not backed by anything of value |
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| a government institution that controls the issuance of currency, provides banking services to the nation's commercial banks, and regulates banking activity |
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| a specified percentage of depositors' money that must be kept on hand by banks |
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| goods that are sold to ultimate users |
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| goods that are purchased either to be immediatly resold or to be incorporated into other goods |
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| the total dollar value of all final goods and services produced by a nation in one year |
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| goods that have a life expectancy of more than one year |
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| items that are expected to be worn out or used up within one year |
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| a negative balance of trade experienced when a nation imports more than it exports |
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| a positive balance of trade experienced when a nation exports more than it imports |
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| the part in the business cycle in which the nation's GNP is on the rise, the number of available jobs is growing, the unemployment rate is falling, and the national income is expanding |
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| the part of the business cycle in which the rapid expansion comes to a halt as shortages in natural resources, high wages, low unemployment, and rising interest rates combine to creat higher prices for consumers |
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| the part of the business cycle in which consumer purchases decline and unemployment increases |
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| the part of the business cycle in which the recessionary phase has bottomed out and the unemployment rate is high while prices and incomes are low |
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| the percentage of the labor force that is not employed but is looking for work |
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| the discouraged workers have been out of work for how long? |
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| unemployment resulting merely because people are temporarily between jobs |
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| occurs when a worker's skills do not match available jobs |
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| created when the labor force is seasonally decreased |
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| unemployment caused by the downside of the business cycle |
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| a lender to whom a debt is owed |
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| those hit the hardest by inflation are those who live on... |
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| a change in the value of money |
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| one in which all people, no matter their income, pay the same percentage of their earnings |
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| one that takes a greater percentage of a person's income as his income increases |
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| one that takes a smaller percentage of a person's income as his income rises |
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| a tabulation of income and planned expenditures |
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| expenses which do not rise or fall as the family's income increases in the short run |
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| the drive for the enforcement of consumer rights started by J.F.K. in 1962 |
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| debt is associated with bondage, the use of debt may prevent a Christian's mobility, debt presumes upon an uncertain future, and it may interfere with the Lord's provision or protection |
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| biblical cautions of debt (4) |
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| some people use debt to purchase goods which will be consumed almost immediately |
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| the calculated use of debt to purchase goods which will increase in value, produce income in the future, or reduce expenses |
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| goods which increase in value over time |
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| a loan with the borrower's savings account serving as collateral |
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| a loan which is made using the equity one has in his house as collateral |
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| one which is used to pay for vacations, education expenses, or to cover personal temporary cash deficits |
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| a non-interest-bearing transaction account offered by commercial banks |
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| an account shared by two or more people |
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| two or more holders of a joint account without the right of survivorship |
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| endorsement of a check consisting of the signature of the payee on the back of the check |
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| an endorsement of a check by the payee that makes the check payable to someone else |
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| an endorsement restricting the payment of the check to only one use, usually for deposit only to the payee's account |
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| an endorsement which stipulates the conditions under which a check may be cashed |
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| a check that is affirmed by a bank or other reputable backer in order to be cashed by the payee |
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| a personal check for which the bank guarantees payment |
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| a guaranteed check bought by a customer and drawn on the bank itself |
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| a small guaranteed check bought at a bank, post office, or other business |
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| guaranteed checks bought through banks from various financial institutions as a means of safekeeping cash during travel |
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| do-it-yourself will, statutory will, one completed by a lawyer |
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| persons appointed by a court to care for orphaned children |
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| the assets and liabilities left by a deceased person |
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| needed to provide for your family when you die |
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| under this, one's employer makes a contribution to the retirement plan and matches the amount of the contribution with a contribution from the employee's paycheck |
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| goods that are usually purchased or used together |
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| government acquisition of the ownership of major industries |
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| the idea that government should generally leave the economy of a nation alone and allow the people to seek their own profit |
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| the most extreme form of socialism in which all individuals voluntarily contribute their labor for the good of society |
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| Leader in the study of public choice |
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| the original amount of the loan received by the borrower |
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| provide loans which usually must be repaid in one single payment within six months of the loan |
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| the amount of goods and services business firms are willing and able to provide at different prices |
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| an oligopoly in which the top four firms account for at least 75% of the market sales |
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| an oligopoly in which the top four firms account for between 50% and 75% of the industry's total sales |
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| an oligopoly composed of exactly two business firms |
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| a coin that contains an amount of gold or silver equal to its face value |
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