Fichas de aprendizaje Econ: Final Qs | Quizlet

paradox of value

apparent contradiction between the high value of nonessentials and low value of essentials

economic interdependence

a reliance on others, as they rely on you, to provide goods and services to be consumed

trade-offs

alternative choices

opportunity cost

whatever must be given up to obtain some item

Gross Domestic Product

the dollar amount of all final goods and services produced within a country's borders in a year.

consumer goods

products and services that satisfy human wants directly

capital goods

buildings, machinery, tools, and other goods that provide productive services over a period of time.

nondurable goods

goods that last a short period of time, such as food, light bulbs, and sneakers

a cost-benefit analysis

balances the cost of the action against the benefits one expects from it

financial capital

the money used to buy the tools and equipment used in production

supply

the amount of goods and services available for sale

supply curve

a graph of the relationship between the price of a good and the quantity supplied

demand

The desire to own something and the ability to pay for it

demand curve

a graph of the relationship between the price of a good and the quantity demanded

compliments

two goods for which an increase in the price of one leads to a decrease in the demand for the other

substitutes

two goods for which an increase in the price of one leads to an increase in the demand for the other

elastic demand

A situation in which consumer demand is sensitive to changes in price

inelastic demand

A situation in which an increase or a decrease in price will not significantly affect demand for the product

unit elastic

a given change in price causes a proportional change in quantity demanded

what causes a shift in supply? In demand?

More demand means higher prices. More supply means prices will have to fall.

the three questions to find individual demand elasticity

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command economy

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

traditional economy

economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services

mixed market economy

economic system that combines both private ownership and government ownership of the means of production

capitalism

an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.

economic and social goals

economic freedom, economic efficiency, economic equity, economic growth, price stability, full employment, economic security,

price stability

No sudden increase or decrease in the overall price of goods

economic growth

the ability of the economy to produce increasing quantities of goods and services

economic efficiency

a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum

economic equity

the attempt to balance an economic policy so that everyone benefits fairly

private enterprise system

Synonymous with the market/capitalist economy; emphasizes the private sector; allows ownership of resources and businesses by individuals in society; permits individuals to make economic decisions rather than the government; allows individuals to recieve benfits and wages from employers

free enterprise system

An economic system in which individuals depend on supply and demand and the profit margin to determine what to produce, how to produce, how much to produce, and for whom to produce. The quest for improvement financially and materially motivates consumers and producers.

macroeconomics

the study of economy-wide phenomena, including inflation, unemployment, and economic growth

microeconomics

the study of the economic behavior and decision making of small units, such as individuals, families, and businesses

supply-side economics

An economic philosophy that holds the sharply cutting taxes will increase the incentive people have to work, save, and invest. Greater investments will lead to more jobs, a more productive economy, and more tax revenues for the government.

total cost

fixed costs plus variable costs

fixed cost

a cost that does not change, no matter how much of a good is produced

overhead

total fixed cost

variable cost

a cost that rises or falls depending on how much is produced

marginal cost

the cost of producing one more unit of a good

horizontal mergers

The combination of two or more firms competing in the same market with the same good or service.

vertical mergers

Merger of companies at different levels of the production process. These are challenged only if they are likely to increase entry barriers in a concentrated market.

e-commerce

Business conducted electronically (buying/selling on web)

traditional theory of wages

A) Belief that wages are mainly determined by supply and demand. B) Impact of union have resulted in setting wages above the market wage.

theory of negotiated wages

states that organized labor's bargaining strength is a factor that helps determines wages

signaling theory

theory that employers are willing to pay more for people with certificates, diplomas, degrees, and other indicators of superior ability.

regional wage differences

Regardless of how wage rates are determined, they can still be different for the same job from one part of the country to another. Labor mobility, cost of living differences, and attractiveness of location can all make a difference. Skilled workers often are scarce in some parts of the country and abundant in others, causing differences in wage rates. These differences, however, can be minimized by (labor mobility)- the ability and willingness of workers to relocate in markets where wages are higher. Another factor that affects wages is the cost of living.

security exchange commission

independent agency of the government that regulates financial markets and investment companies

equities

financial rights to the assets of a business

stock exchange

A place where shares in corporations are bought and sold through an organized system

the efficient market hypothesis

Holds that the expected return on a security equals the equilibrium return AND Is based on the assumption that prices of securities fully reflect all available information

diversification

Spreading out investments to reduce risk

NASDAQ

Stocks of smaller regional companies are traded on brokerage firm's computers because of low volume trades which are not accepted by the large exchanges.

NYSE

The New York Stock Exchange is the largest stock exchange in the U.S. Brokers must purchase the right to sell on the floor of the NYSE.

AMEX

American Stock Exchange, and the second largest stock exchange in the U.S., located in New York City.

S&P500

A stock index based on prices of 500 major U.S. corporations in a variety of industries and market sectors

dow-jones industrial average

a measure of stock market prices based on thirty leading companies of the New York stock exchange and nasdaq

over-the-counter markets

All security markets except the organized exchanges.

bear market

Stock market that experiences a general decline in prices of stock. Not all stocks experience a decline in value, but most do.

bull market

Stock market experiences a general rise in prices and stock trading volume for shares over a period of time.

individual income taxes

largest source of federal revenue

FICA taxes

A federal tax paid by employees and employers for old-age, survivors, disability, and hospitalization insurance

consequences of taxes

raise revenue, redistribute income, influence behavior

sin tax

a relatively high tax designed to raise revenue and reduce consumption of a socially undesirable product such as liquor or tobacco

"tax day"

April 15th

progressive tax

a tax for which the percentage of income paid in taxes increases as income increases

regressive tax

a tax for which the percentage of income paid in taxes decreases as income increases

proportional tax

A tax in which the average tax rate is the same at all income levels.

labor grades

The classification specified for each job in a job category, based on experience, skill and other requirements.

skilled labor

workers who are able to operate complex equipment and can perform their tasks with little supervision

unskilled labor

labor that requires no specialized skills,education, or training

semi-skilled labor

labor that requires minimal specialized skills and education

three barriers preventing upward mobility in-between labor grades

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any resources that are made by humans and used to create other goods and services are called

capital

the resources used to make all goods and services are the

factors of production

an efficient economy is one that

uses its resources to make the most goods/services

the law of increasing costs means that when an economy increases the production of one item

the opportunity cost goes up

the government of a country must make a decision between increasing military spending and subsidizing wheat farmers. this kind of decision is

guns and butter issue

what is a factory building an example of

physical capital

what does a production possibilities frontier show

the maximum amount an economy can produce

what is the struggle among various producers for the consumer's business called

competition

why does even a free market economy need some government intervention

to provide for things that the market place does not

what is one of the most important advantages of a free market

encourages growth

what incentive motivates a manufacturer to sell a product

profit

which of the following is a characteristic of a traditional economy

children have same job as their parents (amish)

what is the product market

households purchase goods/services that firms produce

in what kind of economy does the government make all the decisions

centrally planned

who was the leader that introduced communism and central planning to the former soviet union

vladimir lenin

what is the most effective way for consumers to make their desires known to businesses

the purchases they make

what effect does new technology usually have on an economy

makes economy stronger and more efficient

why does the government require businesses to disclose so much information to the public

make buyers more knowledgeable and safer

what is the term for the total value of all goods and services produced in a particular economy

gross domestic product

what are benefits provided by social security

direct cash transfers of retirement to elderly and living expenses to disabled

a person who consumes a good or service but does not pay for it is called which of the following

free rider

when a consumer is able and willing to buy a good or service, he or she creates which of the following

demand

what are inferior goods

good who's quantity demanded decreases when consumer income rises

how is future price related to current demands

if the price is expected to rise, current demand will rise (vice versa)

what kind of system is the united states economy based on

pure capitalism/laissez-faire capitalism (mixed economy)

ceteris paribus, or "all other things held constant," means

it takes only price into account

what does it mean when the demand for a product is inelastic

are very few satisfactory substitutes for product