Economics Test 1

Vocabulary flashcards for economics exam review.

Production Possibilities Graph

Shows alternative ways to use an economy's resources.

Efficient Economy

Uses its resources to make the most goods and services.

Scarcity

All goods and services are scarce because all resources are scarce.

Law of Increasing Costs

If you shift resources toward producing one good, the opportunity cost of producing the other increases.

Human Capital

A taxi driver's knowledge of the city streets is an example of human capital.

Underutilizing Resources

Producing fewer goods than could be produced.

CD Benefit

Pays a higher interest rate than a traditional savings account.

CD Downside

Money is unavailable for a defined time.

Marketable Jobs

Nursing and Accounting lead to a good variety of what

Secured Loan

The presence of collateral.

Capital

Any resources that are made by humans and used to create other goods and services.

Factors of Production

The resources used to make all goods and services.

Production Possibilities Curve Shift

A new invention lowers the cost of production causing PPC to shift right.

Competition

The struggle among various producers for the consumer's business.

Government Intervention

To provide for things that the marketplace does not address.

Specialization

Makes an economy more efficient.

Adam Smith

Free Market Philosopher.

Product Market

The market in which households purchase the goods and services that firms produce.

Manufacturer Incentive

Making profits on sales.

Canadian Economy

Mixed, but on the side of free market.

Laissez Faire

Disapproval of government funding of education.

Market Economy

Entrepreneurs have more opportunity to achieve success in a what

Consumer Influence

Consumers make their desires known through the purchases they make.

Positive Externality

An economic side effect that generates unexpected benefits.

Gross Domestic Product

The total value of all goods and services produced in a particular economy.

Social Security Benefit

Retirement income for the elderly.

Externality

An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume.

Economic Goals

High employment, steady growth, and stable prices.

Adam Smith's Book

The Wealth of Nations.

Karl Marx's Book

The Communist Manifesto.

Specialization

Referenced as Mr. Herr's frustration with Charles Ingles.

Opportunity Cost

The next best option of any decision.

Guns or Butter

A decision between spending money on a hospital or spending the same amount on border security.

Efficient Economy

An economy that uses its resources to make the greatest possible number of goods and services.