Midterms Master set

Price Elasticity of Demand

[(New Q d-Old Q d)/ old Qd]/[(New Price-Old Price)/ oId Price]

Price Elasticity of supply

[(New Q s-Old Q s)/ old Q s]/[(New Price-Old Price)/ oId Price]

Democracy

Free and Fair Elections, the government represents the majority, and civil rights and liberties are protected.

Fallacy of Composition

the incorrect belief that what is true for the individual, or part, must necessarily be true for the group, or the whole

post hoc fallacy

false assumption that because one event occurred before another event, it must have caused that event

Fallacy of Single causation

A mistaken belief, based on oversimplification, that a particular event has one cause rather than several.

Opportunity cost

The possible value or benefit that could have been gained that is given up to produce something else with the Same resources.

Mixed Economy

Free market, traditional, and command economy elements are all present.

Profit

total revenue - total cost

Accounting profit

total revenue - explicit costs

Factors of production

land, labor, capital, entrepreneurship

Raw materials

Unprocessed natural products used in production

Land

all natural resources used to produce goods and services

Tangible Resources

assets that can be observed and quantified

Intangible Resources

resources that do not have physical attributes and are difficult to quantify

Economic Profit

total revenue - explicit costs - implicit costs

Communism

A theory or system of social organization based on the holding of all property in common, actual ownership being ascribed to the community as a whole or to the state.

Capitalism

An economic system based on private property and free enterprise.

Environment for enterprise

A society's social values and institutions, such as stable government, that are favourable to businesses attempting to produce and sell goods and services.

Traditional Economy

goods and services are produced the way it has always been done

Command economy

An economic system in which the government controls a country's economy.

Market economy

Production decisions based on actions of consumers

capital

Materials used for production

Socialism

Public ownership of means of production in a democratic and peaceful manner

Law of Diminishing Returns

When additional units of a variable input are added to fixed inputs after a certain point, the marginal product of the variable input declines.

Productivity

output per unit of input

Frontier

The curve on a PPC displaying the maximum of 2 products that can be produced with a given amount esouray

Cornucopian Theory

a theory positing that human ingenuity will result in innovations that increase resource amounts

change by diffusion

The spread or diffusion of new ideas and social norms through social interaction and mass media

Non-renewable resources

resources that cannot be replaced

Renewable Resources

Natural resources that can be replaced.

Carrying capacity

the largest population that an environment can support at any given time

Near-Core Periphery

Countries in the periphery that are most globalized and closest to joining the core

More Economically Developed Country (MEDC)

A country with very high levels of economic and human development indicators.

First/Second/Third World

terms to describe the rich, communist, and poor nations of the world.

biocentric worldview

A worldview that holds that humans are just one of many species on Earth, all of which have equal intrinsic value.

anthropocentric worldview

A worldview that focuses on human welfare and well-being.

Globalization

working towards greater global interconnectedness

Limits to Growth thesis

Humanity must put in place policies to control the growth of population

Spaceship Earth

A metaphor likening the Earth to a spaceship with limited resources, in which humankind must learn to sustain itself without exhausting the ship's reservoirs.

Less Economically Developed Countries (LEDCs)

these are countries that have a low gross domestic product and where the average standard of living is low

periphery countries

least developed and least powerful nations

core countries

dominate the world economic system

Developed/Developing

a highly industrialized country/a country that is not yet highly industrialized

New Core countries

Within the core, less powerful, democratic and wealthy

Law of Increasing Returns To Scale

The increase in the rate of extra outputs produced when all inputs used in production are increased and no inputs are held constant.

Law of Increasing Relative cost

law stating that the opportunity cost of producing a good rises as a society produces more of it

Facism

Free market, far right, non-democratic

production possibilities curve

A graph that describes the maximum amount of one good that can be produced for every possible level of production of the other good.

Economic Goals

economic growth, full employment, economic efficiency, price level stability, economic freedom, an equitable distribution of income, economic security, balance of trade

Law of Demand

the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises

Quantity Demanded

the total number of units of a good or service consumers are willing to purchase at a given price

Law of supply

producers offer more of a good as its price increases and less as its price falls

Quantity Supplied

the amount a supplier is willing and able to supply at a certain price

Non-price factors affecting demand

levels of disposable income, the price of related goods, tastes and preferences, expectations, population, price of complementary goods.

Non-price factors affecting supply

Number of sellers, technology, environment, price of related products

Perfect competition

a market structure in which a large number of firms all produce the same product

Marginal Utility

satisfaction or usefulness obtained from acquiring one more unit of a product

Ceiling Price

a maximum, government-set price for something

Subsidy

government payment to encourage or protect a certain economic activity

Quota

a restriction placed on the amount of a product allowed to be produced/ imported

Floor Price

A restriction that prevents a price from falling below a certain level.

Rent control

a price ceiling placed on rent

Minimum Wage

a minimum price that an employer can pay a worker for an hour of labor

monopolistic Competition

a market structure in which many companies sell products that are similar but not identical

Oligopoly

A market structure in which a few large firms dominate a market

Monopoly

A market in which there are many buyers but only one seller.

Mergers

The joining together of two or more companies or organizations to form one larger one.

acquisitions

the incorporation of one firm into another through purchase

Horizontal integration

system of consolidating many firms in the same business

Vertical Integration

the combination in one company of two or more stages of production normally operated by separate companies.

corporate Bonds

Represents debt owned by a corporation to the holder. Paid interest.

Common Shares

shares that give owners voting rights but only residual claims to the firm's assets and income distributions

Preferred Shares

Shares of stock that entitle owner to a fixed dividend amount. do not have voting rights.

Mutual Fund

fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets

Dow Jones Industrial Average (DJIA)

An index that tracks stock prices of 30 large, well-known U.S. corporations.

S&P 500 (Standard & Poor's 500)

an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.

NASDAQ Composite

A stock index based on all domestic and foreign stocks listed on the NASDAQ exchange.

S&P/TSX Composite Index

The indicator of stock market activity used in Canada.

Bull Market

A period of increased stock trading and rising stock prices

Bear Market

a market in which prices are falling, encouraging selling.

commodity Market

a market in which raw materials are traded

Industrial Revolution

the transformation from an agricultural to an industrial nation

Green Revolution (Third Agricultural Revolution)

high yield seeds (hybrid and/or GMOs), increased use of chemicals, mechanized farming, and elaborate irrigation systems

Gaia Hypothesis

the theory, put forward by James Lovelock, that living matter on the earth collectively defines and regulates the material conditions necessary for the continuance of life. The planet, or rather the biosphere, is thus likened to a vast self-regulating organism.

Agricultural Revolution

The time when human beings first domesticated plants and animals and no longer relied entirely on hunting and gathering

Demographic Transition Model

a model of how the size of a population changes as a country develops its economy

Phantom Carrying Capacity

The idea that the Earth can support a large population with a high standard of living using non-renewable resources. However, this is not sustainable in the long term.

Birth Dearth

fertility rates fall below the replacement level of 2.1 children per couple

Demographic Trap

The situation in which a country's population growth rate is so high that the country is not able to develop economically and socially

Pronatalist strategies

ideas or approaches that encourage people to have more children.

Sandwich Generation

Group of people who are caring for both their parents and their children.

DINKS

double income no kids