economics final

economics

how societies choose to allocate their scarce resources

land, labor, capital and entrepreneurship

What are the four factors of production?

make decisions based on what is best combo of cost and benefits

what does it mean to economize?

examines costs and expected benefits of a choice

What is a cost benefit analysis?

illustrates the impact of scarcity on the economy. not all resources are fully employed

What does a Production Possibility Curve Show?

Businesses that supply materials

What is a supplier?

computers make transactions faster

How haVe computers impacted the economy?

Increase economic growth

What is the impact of literacy rate and education on the economy?

Micro = individual

Macro= whole

Microeconomics vs. Macroeconomics?

decisions based based on customs and traditions

Characteristics of a traditional economy?

Karl Marx published The Communist Manifesto

Characteristics of a command economy?

power is held by the consumer

characteristics of a market economy?

incentive to improve material well-being by seeking to gain from economic activities

What is profit motive?

circular flow model

demonstrates how money moves through society. Money flows from producers to workers as wages and flows back to producers as payment for products.

desire for a good or service and the ability to pay for it

What Is demand

how much of a product an individual is willing and able to buy

What does demand curve show?

Market Research

What does the information come from in a demand schedule?

consumer expectation

consumer taste

complements

substitutes

income

market size

What factors impact demand?

BITER

What factors impact demand?

buyers

income

taste

expectations

related goods

BITER

willingness and ability of producers to offer goods and services for sale

What is supply?

new technologies (TESTOR)

What factors affect supply

technology

expectations

number of sellers/producers

taxes and subsidies

other goods

resource costs

TESTOR

when prices increase quantity supplied increases

Impact of price change?

where Supply and demand intersect

What is market equilibrium?

A market structure in which only one seller sells a product with no competition and no substitutes

what is a monopoly

professional sports teams

Geographic monopoly

USPS

Government monopoly

utilities companies

Natural monopoly

patent

Technological monopoly

Situation in which the average cost of production falls as producer grows larger

What does the term economies of scale mean?

many buyers, many sellers

Characteristics of monopolistic competition?

money it takes to start a business

What is a start-up cost?

laws that give the government the power to control monopolies and to break, them up

What is an antitrust law?

joins another company to form a single firm

What is a merger?

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Reducing or eliminating government control of business

What does the term deregulation mean?

A business owned and managed by a single person

What is a sole proprietorship? pros and Cons?

a business that is co-owned by two or more people who agree on how responsibilities,
profits, and losses will be divided

Pro- Specialization of skills
Con- potential for conflict

What is a partnership? Pros and Cons?

Pro- Specialization of skills
Con- potential for conflict

What is a corporation? pros and Cons?

Paying a licensing fee to run a company

What is a franchise? pros and Cons?

a business operated for the shared benefit of its owners, who are also its customers

What is a cooperative? pros and Cons?

the longer you have to invest, the more risk you can take
Risky investments have the potential for the greatest profit

What is a stock?

makes several different types of investments to minimize risk

What does it mean to diversify?

By the market forces of supply and demand

How are stock prices determined?

the market value of all final goods and services
Real GDP is the best way to measure economic growth

What does GDP (Gross Domestic Product) measure?

GDP per person

What does GDP per Capita measure?

total income earned from a nation from goods and services

What is national income?

Period of expanding and contracting economics activity

What is the business cycle?

Depression is a time period of high unemployment and limited business 1929!!!
Recession is prolonged economic contraction lasting six months or more

what is the difference between a recession and a depression?

1929

When was the Great Depression?

\-taxes paid increase as income increases

Progressive tax

The government is trying in influence economic behavior

What is the purpose of a tax incentive?

Withholding is money used to pay towards state and federal taxes

Why do employers “withhold” from your paychecks?

discretionary spending is where the government can choose where to spend money, mandatory is required spending

What is the difference between mandatory spending vs. discretionary spending?

property taxes

Where most of public school funding come from?

taxes and spending are two ways the government uses to influence the economy

What are two basic tools that the federal government uses to influence the economy?

* Market Structures

Free Enterprise

Economic Systems

* What is the most valuable asset for a nation to have in a market economy?

Investing

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educated people

What is the most valuable asset for a nation to have in a market economy?

proportional tax

takes the same % of income

regressive tax

takes a larger % of income from people with low incomes than from people with high incomes