Gov & Econ Unit 3 Test Review

demand

desire, ability, and willingness to buy a product

law of demand

consumers will buy more of a good when its price is lower and less when its price is higher (law that states that the quantity demanded of a good or service varies according to price)

individual demand schedule

a listing that shows various quantities demanded of a particular product at all prices (single customer)

individual demand curve

illustrates the relationship between quantity demanded and price for an individual consumer (demand curve goes down); increase in demand - curve shifts right, decrease in demand - curve shifts left

market demand schedule

a table that lists the quantity of a good all consumers in a market will buy at each different price (ALL consumers)

market demand curve

the demand curve that shows the quantities demanded by everyone who is interested in purchasing the product (downward sloping)

diminishing marginal utility

the extra satisfaction we get from using additional quantities of the product begins to diminish

change in quantity demanded

change in the amount of a product purchased when there is a change in price

change in demand

people buy different amounts of the product at the same prices (affected by non-price determinants)

income effect

a change in quantity demand because a change in price alters consumers' real income

substitution effect

concept used to describe that as prices rise consumers will replace more expensive items with less costly alternatives

factors causing a change in demand

consumer income, consumer tastes, substitutes, complements, change in expectations, change in the # of consumers

demand elasticity & determinants

measures how sensitive consumer demand is to price changes (can purchase be delayed, are adequate substitutes available, does purchase use large portion of income)

elastic demand curve

a small change in the price that causes a relatively large change in the quantity demanded (curve - relatively flat)

inelastic demand curve

a change in prices causes a relatively small change in quantity demanded (curve - relatively steep)

supply

quantities that would be offered for sale at all possible prices that could prevail in the market

the law of supply

principle that states that the quantity supplied or offered for sale, varies directly with its price (high prices = greater quantities for sale)

individual supply schedule/curve

illustrates how the quantity that a producer makes varies depending on the price that will prevail in the market (single producer)

market supply schedule/curve

illustrates the quantities and prices that all producers will offer in the market for any given product or service (all producers)

change in quantity supplied

the change in amount offered for sale in response to a change in price (caused by price)

change in supply

a situation where suppliers offer different amounts of products for sale at all possible prices in the market (caused by non-price factors)

factors that cause a change in supply

cost of inputs (change in cost of productive inputs such as land, labor, and capital), productivity, technology, # of sellers, taxes and subsidies, expectations, government regulations

subsidy

a government payment to an individual, business, or other group to encourage or protect economic activity

supply elasticity

a measure of how the quantity supplied responds to a change in price

elastic supply curve

a small increase in price leads to a larger increase in supply (curve - flatter)

inelastic supply curve

small increase in price causes little change in supply (curve - steeper)

determinants of supply elasticity

elasticity of a producer's supply curve depends on the nature of its production (elastic - adjusts to new price quickly, inelastic - slow to adjust)

price

monetary value of a product as established by supply and demand

surplus

quantity supplied exceeds quantity demanded (above 0)

shortage

quantity demanded exceeds quantity supplied (below zero)

equilibrium price

the price at which the quantity demanded equals the quantity supplied (equals zero)

chief of state

ceremonial head of the government of the United States, symbol of all the people of the nation

chief executive

vested with the executive power of the United States

chief administrator

director of the huge executive branch of the federal government

chief diplomat

main architect of the American foreign policy

chief legislator

principal author of public policies, sets the overall shape of the congressional agenda

commander in chief

commander in chief of the nation's armed forces, military are subject to president's direct/immediate control

chief economist

expected to keep a close eye on the nation's economy and take immediate action when conditions dictate

chief of party

the acknowledged leader of the political party that controls the executive branch

chief citizen

"representative of all the people"

domestic affairs

all matters not directly connected to the realm of foreign affairs

isolationism

a purposeful refusal to become generally involved in the affairs of the rest of the world

executive privilege

inherent power to refuse to disclose certain information to Congress or to the federal courts

staff agencies

legislative agencies that aid the chief executive and other administrators by offering advice and assistance in the management of the organization

line agencies

perform the tasks for which the organization exists

foreign affairs

a nation's relationships with other countries

ordinance power

the power to issue executive orders

executive orders

directives, rules, or regulations that have the effect of law

executive office of the president

umbrella agency, complex organization of several separate agencies, president's "right arm"

bureaucracy

a large, complex administrative structure that handles the everyday business of an organization

line of succession

the order of successors to the presidency if the president is unable to serve as specified in the Constitution and federal law (vice president --> speaker of the house --> senate pro temp --> secretary of state)

qualifications for president

1. natural born citizen

2. at least 35 years old

3. 14 year resident

line-item veto

an executive's ability to block a particular provision in a bill passed by the legislature without vetoing the entire piece of legislation

independent executive agencies

non-cabinet agencies with specialized functions (Amtrak, CIA, environmental protection agency, federal reserve system, NASA, national endowment for the arts, national science foundation, peace corps, social security administration, united states postal service)

independent regulatory commissions

agencies that oversee various aspects of the economy; outside of presidential control

government corporations

agencies that operate like businesses but are financed with public funds and subject to congressional/presidential oversight

cabinet departments

informal advisory body brought together by the president (state, treasury, defense, justice, the interior, agriculture, commerce, labor, health and human services, housing and urban development, transportation, energy, education, veterans affairs, homeland security)

foreign aid

economic and military aid given to other countries

NATO

promotes collective defense of Western Europe

UN

a global organization established to promote international cooperation and maintain peace/security

regional security alliances

countries involved agreed to act to meet any aggression

security council

serves as a Congress for the United Nations

vice president's role

balances the ticket, resides over Senate, and casts tie-breaking votes

recess appointments

appointments during senatorial recess, can bypass Senate approval

secretary of

the title given to the heads of the cabinet departments except for the department of justice

attorney general

the head of the department of justice

reprieve

postponement of the execution of a sentence

pardon

legal forgiveness of a crime

amnesty

a blanket pardon offered to a group of law violators