Term 1: Economics
Definition 1: The study of how societies manage limited resources to satisfy unlimited wants. Ex: Deciding to invest in renewable energy.
Term 2: Market
Definition 2: A network where buying, selling, and production decisions occur. Ex: Retail, housing, & financial markets.
Term 3: Production & Profit
Definition 3: Creating goods/services for sale. Profit is revenue exceeding production costs. Ex: A smartphone manufacturer.
Term 4: Factors of Production
Definition 4: Fundamental inputs needed to produce goods/services: land, labor, capital, & entrepreneurial ability. Ex: To make a car = land, workers, machines, vision of owner.
Term 5: Scarcity
Definition 5: Unlimited wants vs. limited resources forces choices. Ex: A drug company chooses which diseases to address.
Term 6: Economic Behavior & Opportunity Cost
Definition 6: Decisions made to maximize satisfaction/profit facing scarcity. Opportunity cost is value of next best alternative. Ex: Concert vs. studying.
Term 7: Law of Demand
Definition 7: Price increases, demand decreases (and vice versa). Ex: Coffee cheaper = more customers.
Term 8: Law of Supply
Definition 8: Price increases, supply increases (and vice versa). Producers sell more at higher prices. Ex: Strawberry price rises = farmers motivated to plant more.
Term 9: Increasing Marginal Costs
Definition 9: Cost of producing each additional unit rises as output increases. Ex: A toy factory working overtime during the holidays.
Term 10: Market Equilibrium, Surplus, and Shortage
Definition 10: Quantity demanded = quantity supplied. Surplus: supply > demand (price too high). Shortage: demand > supply (price too low). Ex: Smartphone launch.
Term 11: Economic Systems
Definition 11: How society organizes production/distribution. Types: Traditional, Command, Market, Mixed. Ex: USA = Mixed.
Term 12: Freedom of Choice & Market Driving Forces
Definition 12: Freedom to use/sell resources driven by self-interest & competition. Ex: Car manufacturers innovate based on demand and competition.
Term 13: Public Goods
Definition 13: Non-rivalrous & non-excludable goods governments provide. Ex: National defense, public parks, streetlights.
Term 14: Government Intervention (General)
Definition 14: Government actions regulating markets. Ex: Prevent monopolies through antitrust laws.
Term 15: Antitrust Laws
Definition 15: Laws preventing monopolies for fair competition & consumer protection. Ex: Blocking airline mergers.
Term 16: Forms of Taxation (Detailed)
Definition 16: How governments collect revenue influencing income distribution: Proportional, Progressive, Regressive. Ex: Sales tax can be regressive.
Term 17: The Federal Reserve (The Fed)
Definition 17: US central bank ensuring financial stability & implementing monetary policy. Ex: Lowering interest rates to stimulate economy.
Term 18: Fiscal Policy (Detailed)
Definition 18: Govt spending & taxation to influence economy. Ex: Building a dam stimulates the economy.
Term 19: Business Cycle Phases
Definition 19: Fluctuations in economic activity. Phases: expansion, contraction, depression, recovery. Ex: The Great Depression.
Term 20: Inflation
Definition 20: Sustained increase in prices, decreasing purchasing power. Ex: Milk costing more each year.
Term 21: Tariffs & Protectionism
Definition 21: Taxes on imports to protect domestic industries. Ex: limiting trade in USA during world war 1 & 2
Term 22: Free Trade
Definition 22: International trade without barriers. Ex: NAFTA
Term 23: Government Budget: Surplus vs. Deficit
Definition 23: Government revenue vs spending. Surplus: rev > spend. Deficit: spend > rev. Ex: spending over 600 billions.
Term 24: Currency Appreciation
Definition 24: Increase in a currency's value. Ex: American becomes cheaper for an American buyer if the US dollar appreciates.
Term 25: undefined
Definition 25: Decrease in a currency's value. Ex: goods