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Unit One
first test
120
Economics
12th Grade
10/25/2011

Additional Economics Flashcards

 


 

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Term
economics
Definition
study of how individuals & nations use scarce resources to satisfy their wants & needs
Term
what is the key to economics?
Definition
incentives
Term
incentive
Definition
the hope for a reward/fear of a punishment
Term
2 types of incentives
Definition
positive & negative
Term
scarcity
Definition
resources are limited, human desires are unlimited
Term
concept of "free" in politics
Definition
scarce resources are required to produce them
Term
opportunity cost
Definition
sacrifice one thing in order to have another
Term
cost of trade-off
Definition
opportunity cost
Term
guns or butter
Definition
country that decides to produce more military goods has fewer resources to devote to public
Term
factors of production (definition)
Definition
resources used to make all goods & services
Term
the 4 factors of production
Definition
land, labor, capital, entrepreneur
Term
capital
Definition
any human made resource used to produce other goods/services
Term
2 types of capital
Definition
physical capital, human capital
Term
physical capital
Definition
human-made objects that are used to create other goods/services (ex tools & factories)
Term
human capital
Definition
the knowledge & skills a worker gains through education & experience
Term
which types of capital must economy have to grow?
Definition
both
Term
entrepreneurs
Definition
leaders who combine land, labor & capital to create & market new goods/services
Term
what is money? (3)
Definition
a medium of exchange, unit of account, store of value
Term
barter system
Definition
goods4goods
INEFFICIENT - thats why we use money today
Term
economic system
Definition
method used by a society to produce & distribute goods/services
Term
what causes economic systems to differ
Definition
how they respond to scarcity
Term
3 key economic Qs
Definition
1. what G/S shoud be produced 2. how should these G/S be produced 3. who consumes these G/S
Term
economic goals (6) == EEEGOS
Definition
1. efficiency 2. economic freedom 3. open opportunity 4. security 5. equity 6. growth
Term
economic goal - efficiency
Definition
must make best possible use of its resources ->> specialization
Term
economic goal - economic freedom
Definition
free vs command
Term
economic goal - open opportunity
Definition
everyone can compete in the marketplace >> economic mobility
Term
economic goal - security
Definition
successful systems reassure that G/S will be available when needed, most societies try to provide a "safety net", gov assistance to poor/elderly/jobless
Term
economic goal - equity
Definition
must decide how to share wealth
Term
economic goal - growth
Definition
must grow; which comes from innovation [changes in techn & methods of production]
Term
free market
Definition
allows buyers/sellers to exchange things based on voluntary exchange of G/S
Term
voluntary exchange is beneficial bc _________
Definition
it creates mutual gain
Term
what is being created w/ voluntary exchange?
Definition
NOTHING
Term
ex of middleman in free market
Definition
ebay
Term
what do middlemen promote
Definition
economic progress
Term
what leads to the most efficient use of time&money
Definition
specialization
Term
what does an individual want in free market
Definition
intends only his own gain
Term
what happens if sellers do not provide quality, low cost products
Definition
we go to their competitor & they go out of biz
Term
competition _______s inefficient producers
Definition
ELIMINATES
Term
must have ____ & ____ to be in competition
Definition
low price & high quality
Term
history of 2 biggest retailers & biggest auto manufacturers
Definition
then - sears & general motors. now - walmart & toyota
Term
who benefits from competition
Definition
consumers
Term
who controls the economy
Definition
consumers
Term
when consumers buy, they signal ________
Definition
to producers how much to make
Term
published book (name, author, year)
Definition
the wealth of nations by adam smith in 1776
Term
what did the wealth of nations establish
Definition
the theoretical bawsis of the free market economy
Term
what did adam smith observe
Definition
self interest & competition work together to regulate marketplace
Term
what does self interest cause
Definition
consumers to seek high quality, low priced G/S
Term
what does competition force
Definition
producers to provide high Q, low P
Term
what is the invisible hand
Definition
adam's smith phenomenom that self interest and competition occur w/o any outside direction
Term
laissez faire
Definition
gov should not interfere w/ market
Term
advantages of free market (4)
Definition
efficiency, freedom, growth, consumer control
Term
what is consumer control
Definition
idea in free market that consumers decid what gets produced
Term
the 2 things free market economy is powered by
Definition
househouse & firm
Term
household
Definition
person/group liviing in same residence >> consumers
Term
firm
Definition
organization using resources to produce a prodeuct which it sells >> producers
Term
factor market
Definition
place where firms purchase factors of production from households
Term
product market
Definition
G/S firms produce
Term
how do households purchase G/S from product market
Definition
w/ money they received from firms in factor market
Term
how does command economy operate compared to free market
Definition
DIRECT CONTRAST
Term
command economy opposes (4)
Definition
1. private property
2. free market privacy
3. competition
4. consumer choice
Term
socialism is the belief that
Definition
all wealth should be distributed evently throughout society
Term
classes in socialism?
Definition
NOPE
Term
how do they believe equality is possible in socialism
Definition
if the centers of economic power are owned by the public
Term
who developed communism
Definition
karl marx
Term
what did marx believe would happen after 5/6 gen?
Definition
people will become accustomed to sharing & gov will no longer be necessary
Term
karl marx/communism quote
Definition
"to each according to his needs; from each acording to his abilities"
Term
socialism vs communism
Definition
socialism - central gov controls economy. communism - no gov; collective ownership
Term
USSR
Definition
union of soviet socialist republics
Term
who overthrew russian tsar in 1917
Definition
commuinists led by vlamdir lenin
Term
how long did ussr survive
Definition
1991
Term
what happened to farms in soviet union
Definition
gov consolidated them into enormous state-run farms
Term
collectives
Definition
large farms leased to groups of peasant farmers
Term
incentives/income in ussr?
Definition
NO incentives, GUARANTEED income
Term
problems in soviet agriculture
Definition
constant problems in providing their people with food
Term
quote for soviet industry
Definition
we prtend to work and they pretend to pay us
Term
quanitity or quality in soviet?
Definition
QUANTITY, not quality
Term
no competition in ussr =
Definition
no options
Term
american free enterprise, "the land of _____"
Definition
opportunity
Term
how many small biz in america
Definition
18 million
Term
how are most small biz started
Definition
single entrepreneur
Term
free enterprise
Definition
social/political commitment to giving people the freedom to compete in the marketplace
Term
constitutional protections that allow biz activities
Definition
RIGHT TO PROPERTY, 5th amendment (eminent domain)
Term
rights of private ownership (3)
Definition
1. right to exclusive use
2. legal protection against invasion
3. right to sell property to another
Term
without _______, free enterprise CANNNOT exist
Definition
rights of private ownership
Term
sales/direct tax must be ____ for everybody
Definition
equal
Term
amendment of right to tax incomes progressively
Definition
16th
Term
relation b/w producers & consumers & gov & info
Definition
gov make sure producers provide consumers w/ info
Term
legal equality
Definition
everyone has same rights
Term
right of free contract
Definition
allows people to decide which agreements to enter
Term
voluntary exchange
Definition
allows people to decide when/what they want to buy/sell
Term
mixed economy
Definition
limited gov involvement
Term
least free govs
Definition
cuba & north korea
Term
most free govs
Definition
hong kong & singapore
Term
% n korea controls & china controls
Definition
95, 75
Term
who owned hong kong & what kind of economy system
Definition
great britain, free
Term
"regulate" vs "deregulate"
Definition
gov gets involved, gov pulls back
Term
public goods
Definition
G/S provided by gov
Term
what kind of public goods must gov provide
Definition
those that are impossible to exclude nonpayers (ex sidewalk, police protection)
Term
public sector vs private sector
Definition
public: part of economy that provides & maintains public goods
private: involves transactions of prviate biz & indv
Term
free rider problem animal example
Definition
mosquito
Term
why are public goods usually impossible for a private biz to establish
Definition
bc a 1-1 link b/w payment and receipt is hard to establish
Term
public goods are necessary due to ______
Definition
free rider problem
Term
market failure
Definition
when a free market does NOT provide a G/S efficiently
Term
externality
Definition
economic side effect of a G/S that generates benefits/costs to someone other than the person who decides how much to produce/consume
Term
positive externality
Definition
benefit everybody, not just those who have paid
Term
negative externality
Definition
cause part of the cost of production to be paid for by someone other than the producer
Term
how does gov encourage positive externality
Definition
by providing public education so we can have a well educated workforce
Term
poverty treshold/line
Definition
income level below that which is needed to suport family/household
Term
poverty line in 2010 for single praent w/ one child vs family of 4
Definition
10,956........... 21,954
Term
poverty line adjusts to _______
Definition
inflation
Term
what is poverty the result of
Definition
unequal distribution of wealth
Term
what is welfare
Definition
gov aid for the poor
Term
when did welfare begin
Definition
under franklin roosevelt during great depression
Term
who expanded welfare
Definition
lyndon johnson in 1960s war on poverty
Term
cash transfers: direct or indirect?
Definition
direct
Term
cash transfer
Definition
direct transfer to the poor done by state/fed gov
Term
4 types of cash transfer
Definition
1. temp assistance for needy family
2. social security
3. unemploymet insurance
4. workers compensation
Term
in-kind benefits: direct or indirect?
Definition
indirect
Term
in-kind benefits
Definition
goods/services produced at free/reduced prices
Term
medicaid vs medicare
Definition
poor........ elederly
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