honors econ test

economics

study of choices of produces or consumers people make as proudcers and consumers

goods

things

ex: starbucks lattes, textbooks

services

teaching cant see or change but is entity; something performed for someone

ex: plumbing job, paint job

producers

makers of something

consumers

buyer of something

resources

A source or supply of something useful; natural: food, air, water, trees (God made)

corporate: buildings (man made)

capitalism

The private ownership of economic resources by individuals rather than by the government; economic system; private enterprise to make/invest money

free enterprise

how it works for capitalism; buy your own stuff

market economic system

selling and buying goods; meeting at market price

means of production

making something; how you do it

socialism

An economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole; partial owned by gov and by people

communism

all economic state owned; china since makes money for state is able to be owned privately

command economic system

always during war times; US regulate the amount of something made and sold

private property

ownership by human

ex: Xavier College Preparatory

public property

gov ownership

ex: Central High School

gross domestic product

all you make take out for cost net worth; full range of all produced in country

consumer sovereignty

what buyers want they get

demand

how much want there is for something; higher want = lower supply = price go high; high supply = low demand = price low

supply

goods; amount of product that a company has

market price

supply = demand

wage

salary/earnings; amount of money that employees make for their work

barter

trade (money is the ultimate barter); give for something else; do not include money

money

agreed upon price

federal reserve system

regulated money and banks supply in country; lend money to banks

depositor

puts money into bank

inflation

An increase in prices and fall in the purchasing value of money.

rise in costs --> high unemployment --> recession --> depression; price of goods go up

recession

high unemployment and high prices; turn into depression if really bad

consumer price index

determines price to live in US each year

consumption

use of something

producer

the maker of something; creator

necessities

what you need to live

ex: food, clothes, shelter

luxuries

everything else not a necessity

ex: perfume, starbucks

conspicuous consumption

the use of a good or service to impress others

ex: people who spend $500 on jeans, 12 room house

advertising

try's to get you to buy something or want something

budget

a plan of how much a person spends and how much they earn; earn more than spend profit invest

variable expense

unintended expense

fixed expense

expense that is the same each year

ex: air conditioner

income

money you make

savings

what you put for future use

investments

company use your money by stock = shares; how you use saving for stocks/property

dividends

profit of stock

insurance

risk at damage (car, house, health, life) unexpected expenses

stock

Money in a corporation; when a person has this, they have partial ownership of a company

credit

how much you owe

beneficiary

somebody dies money goes to you

social security

set up 1930 old age pension no other income; disability, over 65

medicare

health insurance over age 65

worker's compensation

injured on job get paid

pension

retirement benefits, beyond social; some work companies offer to retired employees

"lemon law"

used cars; must be honest

wages

salary you get

union

organization for workers rights

injunction

law that force union to go back to work

closed shop

have to be union member to work in state; not Arizona

craft union

specialized union

ex: plumbers, electricians

Wagner Act

allowed unions to exist in country

collective bargaining

labor and management meet to determine hours, wages, and benefits

arbitration

cant find a solution so bring one person in to say how it will be

mediation

Settling a dispute by asking for advice from an impartial outsider

ex: lets talk about this

lockout

company shuts down & wont let worker in

strike

union stops work from happening; no show for work

two-tier wage system

almost everybody uses it; people who worked at a place for a long time earn more money than those who have recently begun to work at same company

profit

left over after expenses; more income than expenses

sole proprietorship

one person owns something

corporation

many owners/stockholders

stockholders

those who own shares in a company

charter

A legal document giving certain rights to a person or company

limited liability

A form of business ownership in which the owners are liable only up to the amount of their individual investments; advantage of corporation

board of directors

runs corporation

ex: John Rockefeller

stock exchange

buy and sell stock

bull and bear markets

rise and falling market

capital gain

money made

interchangeable parts

Identical components that can be used in place of one another in manufacturing

ex: Eli Witney invented

mass production

huge amounts; assembly line; cheap and quick

automation

robots on assembly line

overhead expense

All costs on the income statement except for direct labor, direct materials, and direct expenses

monopoly

lots of money in sole ownership

assembly line

A long line of workers and equipment where one worker or group of workers does one job

merger

combo of 2 or more businesses into 1

copyright

A protection on anything written or hand-done

ex: writing, music, art, publication

patent

protection on an invention

income tax

Tax paid to the state, federal, and local governments based on income earned over the past year; what you earn

excise tax

luxury tax; specific tax

ex: gasoline

sales tax

on many different things but same rate; not on food