Economics Review Flashcards

Vocabulary flashcards based on lecture notes covering economics topics such as scarcity, demand, supply, market structures, taxation, government spending, money, and investment.

Scarcity

The economic concept where resources are limited and cannot satisfy all human wants and needs.

Factors of Production

Land (natural resources), labor, capital, and entrepreneurship.

Opportunity Costs

The cost of the next best alternative use of resources when one choice is made instead of another.

Stock

Ownership certificate.

Bond

A promise to pay back the money you borrow at a later date.

Demand

When the price goes up, people buy less & When the price goes down, people buy more.

Complements

Goods or services that go together. When you use one, it makes the other more valuable or more popular.

Substitutes

Goods or services that can do the same thing and can be used instead of each other.

Elastic Demand

People buy a lot more or a lot less when the price changes.

Inelastic Demand

People buy almost the same amount even if the price changes.

Market Supply Curve

Can be changed by: Changes in costs, technology, number of sellers, government rules, future price guesses, or natural disasters.

Total Cost

Fixed costs + variable costs.

Prices in Allocation

Prices act like signals to help resources go where they’re needed most.

Surplus

Having more than what’s needed.

Theory of Competitive Pricing

A model to compare how other markets work.

Deficiency Payments

Money the government gives producers to make up for low market prices.

Perfect Competition

A perfect market used to compare with real ones.

Monopoly

Only one seller controls the market.

Alternative Minimum Tax

A backup tax rule that makes sure some people pay enough taxes.

Flat Tax

One tax rate for everyone, no matter their income.

Mandatory Spending

Spending that must happen by law

Pay-As-You-Go (PAYGO) Provision

New spending must be paid for by cuts or new taxes.

Commodity Money

Has real value.

Fiat Money

Has value because the government says so.

Roth IRA

Pay tax now, withdraw tax-free later.

IRA

May be tax-deductible now, taxed later.

Pension

Employer puts money in for you; you pay taxes when you get it.

401(k)

Pre-tax or Roth; taxed depending on which one you choose.

Inflation

Prices go up over time.

Monetize the Debt

The government prints money to pay what it owes.

Supply Side Economics

Grow the economy by making more goods/services.

FDIC

Protects your money in the bank.

Bull Market

Stock prices go up.

Bear Market

Stock prices go down.