Economics Lecture Review

A comprehensive set of 157 vocabulary flashcards covering key economic concepts, market structures, trade topics, personal finance terms, and policy tools from the lecture notes.

Quota

A government-imposed limit on the quantity of a good that may be imported.

Monopolistic Competition

A market structure with many firms selling similar but differentiated products (e.g., brands of toothpaste).

Oligopoly

A market dominated by a few interdependent firms that recognize their mutual influence.

Import

A good or service a nation buys from other countries.

Credit Union

A member-owned financial cooperative that typically offers the lowest consumer-loan rates.

Production Possibilities Curve

A graph showing all efficient combinations of goods an economy can produce with available resources.

Economic Growth

An outward shift of the PPC indicating increased output over time.

Interdependence (Oligopoly)

The situation in which each firm’s actions affect its rivals’ profits and strategies.

Structural Unemployment

Job loss caused by technological change or shifts in demand for certain skills.

Shared Account

Savings or checking account terminology used by credit unions.

Closed Economy

An economy that restricts or eliminates international trade.

Government Intervention

State actions to influence markets, often criticized for raising prices and using more resources.

Stagflation

A period of high inflation combined with high unemployment.

Marginal Utility

The extra satisfaction gained from consuming one more unit of a good.

Mixed Economy

An economic system combining market forces with some government involvement.

Command Economy

An economic system where the government owns production factors and sets output and prices.

Production Possibilities Frontier Shift

Movement of the PPC caused by new technology, resources, or population changes.

Demand

Quantities consumers are willing and able to buy at various prices.

Supply

Quantities producers are willing and able to offer at various prices.

Income

Money received for completing a job or service.

Olig- Prefix

Greek root meaning “few,” as in oligopoly.

Human Rights Trade Sanction

A ban on trade with nations that violate human rights (e.g., using child labor).

Perfect Competition

A market structure with many sellers, identical products, and the lowest consumer prices.

Identical Products

Characteristic of perfect competition where goods offered are exactly alike.

Buyers and Sellers

Market participants whose interaction determines prices through supply and demand.

Real Income

Income adjusted for inflation, reflecting purchasing power.

Scarcity

The fundamental problem of limited resources versus unlimited wants.

Trade-Off

Giving up one option to gain another due to scarce resources.

Equilibrium Price

The price at which quantity demanded equals quantity supplied.

Equilibrium Quantity

The amount bought and sold at the market-clearing price.

Market Clearing Price

Another name for equilibrium price; no surplus or shortage exists.

Demand Shifter

A non-price factor (e.g., tastes, income) that moves the demand curve.

Credit Card Pitfall

Risk of high debt accumulation due to easy credit access.

Quantity Demanded

The specific amount consumers will buy at a particular price.

Protectionist

Someone favoring tariffs, quotas, and barriers to protect domestic producers.

Free-Enterprise Economy

Another term for a market economy emphasizing private business freedom.

Market Economy

An economy where prices and production are determined by voluntary exchange.

Economic Efficiency

Producing on the PPC so no more of one good can be made without less of another.

Central Planning Committee

Government body in command economies that sets output and prices.

Price Fixing

Illegal collaboration among firms to set prices.

Downward Sloping Demand

Illustrates the inverse relationship between price and quantity demanded.

Law of Demand

As price rises, quantity demanded falls, ceteris paribus.

Substitution Effect

Consumers replace higher-priced items with cheaper alternatives.

Investment

Spending on capital goods; one component of GDP.

Capital

Man-made resources like machinery used in production.

Opportunity Cost

The value of the next-best alternative forgone.

Entrepreneurship

Risk-taking and resource coordination to produce goods or services.

Traditional Economy

System relying on customs, discouraging new methods or innovation.

Government Ownership

State control of production factors, typical in command economies.

Wage Equality (Command)

Feature of command systems where pay is similar regardless of productivity.

Opportunity Cost of Time

Income or value sacrificed when time is used for another activity.

Factors of Production

Land, labor, capital, and entrepreneurship.

Human Capital

Workers’ skills, education, and abilities.

Mineral Deposits

Example of natural resources in production.

Technology (Production Factor)

Scientific knowledge that can expand production possibilities.

Explicit Cost

A direct monetary payment, or out-of-pocket cost.

Marginal Benefit

Additional satisfaction from consuming one more unit.

Cost-Benefit Analysis

Comparing marginal costs and benefits to guide decisions.

Marginal Cost

The extra cost of producing or consuming one additional unit.

Marginal Analysis

Decision making by weighing marginal benefits against marginal costs.

Consumption

Household spending on goods and services.

Government Spending

Public expenditure on goods and services.

Net Exports

Exports minus imports in GDP calculation.

GDP Formula

GDP = C + I + G + XN.

Nominal GDP

GDP measured in current prices, unadjusted for inflation.

Real GDP

GDP adjusted for price changes, reflecting actual output.

Inflation

A general rise in prices over time.

Consumer Price Index

Index tracking price changes for a market basket of urban consumer goods.

Market Basket

Representative set of goods used to compute a price index.

Cyclical Unemployment

Joblessness related to downturns in the business cycle.

Recession

A decline in real GDP for at least two consecutive quarters.

Business Cycle

Recurring pattern of economic expansion and contraction.

Expansionary Fiscal Policy

Government increases spending or cuts taxes to boost GDP.

Contractionary Fiscal Policy

Government cuts spending or raises taxes to slow inflation.

Tax Rate

Percentage at which income or purchases are taxed.

Automatic Stabilizer

Program that automatically provides benefits during economic downturns.

Keynesian Economics

Demand-side theory favoring active government spending to manage cycles.

Policy Lag

Delay between recognizing a problem and policy impact.

Money Supply (M1)

Currency plus checkable deposits available for spending.

Savings Deposit

Funds placed in a bank or credit union account not part of M1.

Comparative Advantage

Ability to produce a good at lower opportunity cost than others.

Free Trade

International exchange without tariffs, quotas, or barriers.

Economic Interdependence

Mutual reliance of trading partners on each other's production.

Peace Through Trade

Idea that commerce fosters cooperation and reduces conflict.

Tariff

Tax on imported goods to protect domestic industries.

Embargo

Complete ban on trade with a specific country.

Free Trader

Person who favors minimal trade restrictions.

Infant Industry Argument

Claim that emerging industries need protection until competitive.

Low-Skill Good

Product requiring minimal training, often exported by developing nations.

NAFTA

North American Free Trade Agreement among the U.S., Canada, and Mexico.

Globalization

Worldwide economic integration and interconnection.

Outsourcing

Moving jobs or services abroad to reduce costs.

Renewable Energy Jobs

Fast-growing employment in fields like solar and wind power.

Technology Sector

Industries related to computing and information technology.

Finished Good

Final product sold to consumers and counted in GDP.

Technological Unemployment

Job loss from automation replacing human labor.

Implementation Lag

Time taken to put approved policy into operation.

Recognition Lag

Delay in identifying economic conditions needing policy action.

Decision Lag

Period policymakers spend debating and approving measures.

Simple Interest

Interest calculated only on principal: I = P × R × T.