Economics Foundations Flashcards

A set of vocabulary flashcards covering the seven units mentioned in the lecture notes, including fundamental economic principles, market mechanics, labor statistics, macroeconomics, trade, and personal finance.

Scarcity

Limited resources, unlimited wants

Opportunity Cost

What you give up

Trade-off

Alternatives sacrificed

Incentive

Motivation for decisions

Economics

Study of choices with limited resources

Traditional Economy

Based on customs

Command Economy

Government controls

Market Economy

Individuals/business decide

Factors of Production

Land, Labor, Capital, Entrepreneurship

Law of Demand

$$\text{Price up} \rightarrow \text{Demand down}$$

Law of Supply

$$\text{Price up} \rightarrow \text{Supply up}$$

Demand Curve

Downward

Supply Curve

Upward

Equilibrium

$$\text{Supply} = \text{Demand}$$

Movement

Caused by price change

Shift

Caused by external factors

Minimum Wage

Lowest legal pay

Frictional Unemployment

Between jobs

Structural Unemployment

Skills mismatch

Cyclical Unemployment

Economic downturn

Outsourcing

Jobs moved for cheaper labor

Globalization

Worldwide business

GDP

Total goods/services produced

CPI

Measures inflation

Inflation

Prices rising

Purchasing Power

What money can buy

CPI and Purchasing Power

$$\text{CPI up} \rightarrow \text{Purchasing power down}$$

GDP and Economy

$$\text{GDP up} \rightarrow \text{Economy growing}$$

Tariff

Tax on imports

Import

Goods coming in

Export

Goods sent out

Free Trade

No restrictions

Protectionism

Protect local businesses

Subsidy

Government support

Budget

Plan your money

Credit Score

Borrowing trust level

Interest

Cost of borrowing

Compound Interest

Interest on interest

Savings

Money set aside

Investment

Money making money

Debt

Money owed

Minimum Payment

Smallest credit payment