SS paper quiz.docx

Externality

unintended side effect of an action

Monopoly

sole provider of a good or service

Merger

combination of two or more companies into a single business

Recall

situation in which an unsafe product is pulled off the market

Antitrust Law

legislation to preserve competition

Public Goods

They are paid for through taxes and other fees collected by government.

Federal Trade Commission

government agency maintaining competition in the marketplace

Private Companies

often owns natural monopolies of water and sewer services

FDA

government agency ensuring truth in product advertisements

Market Economy

Individuals and businesses own the resources used to produce goods and services

Traditional Economy

Economic questions are answered on the basis of habit or custom

Command Economy

Planners who work for the government answer the economic questions

Economics

The study of how people use limited resources to satisfy unlimited wants

Mixed Market Economy

Government and private business owners play roles in a competitive-for-profit system

Capital Resource

factory building is an example of this type of resource

Scarcity

all resources are limited, but wants are not

Economic Questions

what, how, and for whom to produce

Market Economy

economic decisions made based upon price

Opportunity Cost

The cost of the next-best use of your money or time when you choose to do one thing rather than another

Fixed Costs

Expenses that do not change no matter how much a business produces

Variable Costs

Expenses that change depending on how much a business produces

Marginal Cost

The increase in expenses caused by producing an additional unit of something

Trade-off

Giving up one alternative good or service for another

Fixed Costs

electric bill is an example of this

Marginal Revenue

The additional income received from each increase of one unit in sales

Benefit-Cost Analysis

What businesses utilize when making decisions among various projects

Standard of Living

quality of life based on the possessions of necessities and luxuries

Natural Resources

materials in nature that make production possible

Gross Domestic Product

value of annual output in a country

Capital

tools, machinery, and buildings used to make products

Entrepreneurs

people who take risks to start new businesses or introduce new products

United States Production

one-fifth of all goods and services in the world

GDP

reflects the price of All final goods and services

GDP per Capita

better measure than GDP when comparing economic activity of countries

GDP

measures the amount produced within a country as well as a nation's income

Economic Freedom

U.S. marketplace can adapt quickly to changing economic conditions

Supply and Demand

forces that decide what producers will produce and what consumers will purchase

Profit Motive

incentive that drives the U.S. economy

Competition

among producers leads to greater efficiency, higher-quality products, and more satisfied customers

Private Property Rights

owning, keeping, and using something you purchase any way you wish

Citizens

make most of the economic decisions in the United States

Voluntary Exchange

activity that takes place in the markets

CJ

entrepreneur who invested $1.50 in savings to start a business

Adam Smith

argued that people should work for their own self-interest

Developing Countries

countries with low GDPs per capita

Newly Industrialized Countries

growing economic powers that have not yet reached the level of output of developed countries

Privatization

process of changing state-owned businesses into ones owned by private citizens

Supply and Demand

economic decisions based on in countries switching from command to market economies

Debt

problem faced by many developing countries that borrowed large sums of money

Newly Industrialized Countries

Countries that have rapidly developed industrial sectors and are experiencing quick economic growth.

Privatization

The transfer of ownership of businesses or properties from the government to private individuals or companies.

Supply & Demand

The relationship between the availability of a good or service and the desire for it, influencing its price in the market.

Debt

Money borrowed by individuals, organizations, or countries that needs to be repaid with interest.

Factors of Production in a Market Economy

Owned by individuals, including resources like land, labor, and capital used to produce goods and services.

Command Economy Advantage

Ability to redirect resources rapidly to meet changing needs or priorities.

Government Role in a Mixed Economy

Involvement in setting minimum wages to ensure fair compensation for workers.

Single-Resource Economy

Relies heavily on the export of one primary product for its economic sustenance.