Results for "Scarce resources"

Native Americans Organized by tribe. Geography influences culture for various groups. Northwest Coast Pacific ocean, whales, totem poles, log homes. Southwest Desert and canyons, cliff homes. Great Plains Buffalo, teepee homes made of animal hide. Eastern Woodland Long houses or other wood homes, Iroquois nation, 5 civilized tribes. Farmed the Three Sisters - beans, corn and squash. Animism Religious belief that there are spirits in inanimate objects (mountains, rivers, animals). Columbian Exchange Transfer of biological material (animals, plants and disease) between the New World and Europe during the age of exploration. Jamestown Settled by businessmen from England who sought to make money by growing and selling tobacco. Massachusetts Bay Settled by Puritans from England who were seeking religious freedom for themselves. New England Colonies Influenced by good harbors, abundant forests, rocky soil, and a short growing season. Middle Colonies Culturally diverse, bread-basket because of grain farming. Southern Colonies Provided agricultural products that were processed in the North and in Europe. Triangular Trade Led directly to the increased importation of enslaved Africans to the Western Hemisphere. Middle Passage The journey of slaves from Africa to the new world. British Mercantilism Economic policy used by the British in which the American Colonies served as a source of raw materials and a market to sell goods. French and Indian War Caused by disputed land claims in the Ohio River valley between the French and the British. Virginia House of Burgesses Early colonial efforts in self-government contributing to the development of representative democracy. Mayflower Compact Early colonial efforts in self-government contributing to the development of representative democracy. Town Hall Meetings Early colonial efforts in self-government contributing to the development of representative democracy. Albany Plan of Union Early attempt to unify American colonies but under British rule. Declaration of Independence States the colonial grievances against British rule and was written by Thomas Jefferson. John Locke's theory of natural rights Power to govern belongs to the people ('consent of the governed'). Bill of Rights Both documents support limitations on governmental power and stress the importance of individual liberty. NO TAXATION WITHOUT REPRESENTATION Many colonists believed they could not be taxed by the British because they had no representatives in the British government, which means that the British did not have the consent of the governed. Thomas Paine Published Common Sense which was influential in persuading American colonists to support colonial independence from Britain. Convinced many Americans who had been undecided about declaring independence from Britain. Response to Mercantilist Policies Committees of Correspondence/Non-importation Agreements/Boston Tea Party First Continental Congress. Sugar and Stamp Acts Tax foreign molasses and printed material. Quartering Act Requires colonists to house and feed British soldiers. Townshend Acts Taxes imported goods and tea. Boston Massacre Five people killed by British soldiers. Revolutionary War Begins shortly after the signing of the Declaration of Independence. American Colonies Win the war and independence with the help of familiar land and foreign aid from France. Mississippi River Became the western boundary of the U.S. at the end of the Revolutionary War. Articles of Confederation First form of government used by the U.S. after independence from Britain. The first plan of union for the original 13 states. Decentralized Political System Power is broken up and divided among many groups, not unified. Problems and Weaknesses of Articles Largely unsuccessful at solving many major problems because most powers remained with the state governments. Congress Depended on the states for men and money to support an army. The federal government could not enforce its laws. States' Powers Had the power to collect taxes, coin money, and control trade. Success of the Articles Provided a system for governing the Western territories and a process for admitting new states to the union. Constitutional Convention (1787) Major American delegates meet in Philadelphia to correct the weaknesses of the Articles of Confederation. Shays' Rebellion (1786) Significant because it convinced many Americans of the need for a stronger national government. Exposed the weaknesses of the Articles of Confederation. Bicameral Legislature Created a legislature with two houses that write and vote on laws. Three-Fifths Compromise Determined that 3/5 of the slave population would be counted for representation in the House. U.S. Constitution A statement of rules and procedures for governing the U.S. Sovereignty Derived from the consent of the governed (only the citizens give the government the power to rule). Democracy A government for the people by the people. A democracy must have citizen participation in government. Democratic Government A government characterized by a free and open election process. Republican Government A government in which representatives are elected by the people. Division of Power The concept included in the Constitution to prevent unlimited government power through federalism, checks & balances, and separation of powers. Federalism The division of powers between the national and state government. Legislative Branch The branch of government that includes Congress (House of Representatives and Senate) which proposes, writes, votes on laws, and approves treaties. Executive Branch The branch of government that includes the President of the U.S. and his cabinet. Judicial Branch The branch of government that includes federal courts and the Supreme Court. Marbury v. Madison A landmark case that established judicial review and strengthened the Judiciary branch of the U.S. Checks & Balances A system where each branch of government checks the others to ensure no one branch has too much power. Impeachment The process by which the President can be removed from office by trial conducted by Congress. Veto The power of the President to reject a bill passed by Congress. Override of Veto The process by which Congress can pass a bill despite a presidential veto, requiring a two-thirds vote of both houses. Elastic Clause A clause that allows Congress to pass laws necessary and proper to fulfill its duties, broadening its power. Judicial Review The power of the courts to declare laws unconstitutional. Electoral College The body that elects the President of the U.S. based on electoral votes from each state, not a popular vote. George Washington The first President of the U.S. who set precedents for future presidents and issued the Proclamation of Neutrality. Whiskey Rebellion A rebellion in western Pennsylvania against a new excise tax, which Washington suppressed using state militia. Farewell Address A speech by Washington urging the U.S. to avoid European conflicts and alliances. Louisiana Purchase (1803) The acquisition of the Louisiana Territory by Thomas Jefferson, which contradicted his strict interpretation of the Constitution. Mississippi River Control The goal of the Louisiana Purchase to secure U.S. control of the Mississippi River for trade. Ohio River Valley The region whose farmers gained the greatest economic benefit from the Louisiana Purchase. Westward Expansion The focus of the U.S. following the Louisiana Purchase, promoting settlement and development of western territories. Articles of Confederation The first constitution of the United States, which established a weak federal government. Washington's Precedents The traditions and practices established by George Washington during his presidency. Constitutional Convention The 1787 meeting in Philadelphia where the U.S. Constitution was created. Shays Rebellion An armed uprising in 1786-1787 by farmers in Massachusetts protesting economic injustices. US Constitution The supreme law of the United States, establishing the framework of government. Great Compromise The agreement that established a bicameral legislature in the U.S. Congress; Settled a dispute over state representation in national Congress. ⅗ compromise The agreement that slaves would count as three-fifths of a person for representation purposes. Commerce Compromise The agreement that allowed Congress to regulate commerce but prohibited export taxes. Bill of Rights The first ten amendments to the U.S. Constitution that guarantee individual liberties. Federalists/Antifederalists Federalists supported the Constitution; Antifederalists opposed it, fearing too much central power. 3 branches of government The division of government into the legislative, executive, and judicial branches. Checks and Balances A system that ensures no one branch of government becomes too powerful. Louisiana Purchase The 1803 acquisition of territory from France that doubled the size of the United States. Loose/strict constructionists Loose constructionists interpret the Constitution broadly; strict constructionists interpret it narrowly. Indian Removal The policy of relocating Native American tribes to lands west of the Mississippi River. Civilization The process of assimilating Native Americans into American culture. Trail of Tears The forced relocation of Native Americans from their homelands, resulting in thousands of deaths. Worcester v. Georgia A Supreme Court case that ruled in favor of Native Americans but was not enforced by Jackson. Andrew Jackson The seventh President of the United States known for his populist policies and Indian removal. Manifest Destiny The belief that the U.S. was destined to expand across the North American continent. Cotton Gin A machine that quickly and efficiently removes seeds from cotton fibers. Missouri Compromise An agreement passed in 1820 that allowed Missouri to enter the Union as a slave state and Maine as a free state. Compromise of 1850 A package of five separate bills passed by the United States Congress to defuse a political confrontation between slave and free states. Abolitionists Individuals who advocated for the immediate end of slavery in the United States. Kansas Nebraska Act A law that allowed voters in Kansas and Nebraska to choose whether to allow slavery, effectively repealing the Missouri Compromise. Dred Scott v Sanford An 1857 Supreme Court case that ruled that African Americans could not be American citizens and that Congress had no authority to prohibit slavery in federal territories. Bleeding Kansas A series of violent political confrontations in the United States involving anti-slavery and pro-slavery elements in Kansas. Uncle Tom's Cabin An anti-slavery novel by Harriet Beecher Stowe published in 1852 that depicted the harsh realities of slavery. Underground Railroad A network of secret routes and safe houses used by enslaved African Americans to escape to free states and Canada. Horace Mann An American educational reformer who promoted public education and is known as the 'Father of the American Public School System.' Seneca Falls Convention The first women's rights convention held in 1848, which launched the women's suffrage movement in the United States. 2nd Great Awakening A Protestant religious revival during the early 19th century in the United States that emphasized individual piety and a personal relationship with God. Temperance A social movement against the consumption of alcoholic beverages. Civil War A conflict from 1861 to 1865 between the Northern states (Union) and Southern states (Confederate States) over issues including states' rights and slavery. Abraham Lincoln The 16th President of the United States who led the country during the Civil War and worked to end slavery. Emancipation Proclamation An executive order issued by Abraham Lincoln in 1862 that declared the freedom of all slaves in Confederate-held territory. Reasons for North (Union) Victory The North was better prepared economically, had more human resources, and superior war material. Reconstruction Era The period following the Civil War during which the Southern states were reorganized and reintegrated into the Union. Lincoln's Plan for Reconstruction Aimed to restore Southern representation in Congress and offered amnesty to Confederates who swore allegiance to the U.S. Radical Republicans A faction of the Republican Party that sought to impose harsh penalties on the Southern states and promote civil rights for freed slaves. Andrew Johnson The 17th President of the United States who succeeded Abraham Lincoln and oversaw the early years of Reconstruction. Reconstruction A policy supported by Lincoln to allow Southern States to reenter the nation as quickly as possible. Radical Republicans Members of Congress who disagreed with Johnson about how to handle Reconstruction, leading to Johnson's impeachment. Impeachment of Johnson Johnson was impeached for firing Secretary of War Edwin M. Stanton without Senate approval, but the impeachment failed. 13th Amendment Law that formally abolished slavery in the U.S. in 1865. 14th Amendment Law that officially gave citizenship to African Americans and legally protected them under the Bill of Rights and U.S. Constitution. 15th Amendment Law that granted African Americans voting rights. Poll Taxes Fees collected by Southern States to restrict African Americans from exercising their voting rights. Literacy Tests Requirements imposed by Southern States to limit African Americans' voting rights. Jim Crow Laws Laws enacted in the 1870s and 1880s to restrict the freedoms of African Americans after the Civil War. Plessy v. Ferguson Supreme Court case in 1896 that upheld Jim Crow Laws based on 'separate but equal' public facilities for African Americans. Black Codes Laws aimed at restricting the rights of former slaves and limiting the effectiveness of the 14th and 15th amendments. Ku Klux Klan Group that attempted to restrict the rights of former slaves. Sharecropping System of farming in Southern States after the Civil War that kept former slaves economically dependent on farms. New South Term describing changes in the Southern economy, including industrial development and agricultural diversification. Sectionalism The division between the North and South that contributed to tensions leading up to the Civil War. Gilded Age Period marked by economic growth and industrialization in the U.S. Industrial Revolution Causes Factors such as capital, labor supply, Erie Canal, and transcontinental railroads that contributed to industrial growth. Mechanization of Agriculture The use of machines in farming that led to an increase in production. Effects of Industrial Revolution Challenges for smaller industries, development of monopolies, widening economic gap, and increased immigration. Social Darwinism Theory which believed that the growth of large business at the expense of others was merely survival of the fittest (the stronger businesses will succeed and the weaker one will fail). Laissez-faire Capitalism Economic policy which argues that government should limit any interference in the economy (the government should leave the economy alone). Rise of Big Business (1865-1900) Federal Government followed laissez-faire economic policy. Trusts and monopolies were created by entrepreneurs to maintain control of the market. Robber Baron Term used during the Gilded Age to characterize leaders of big business who used ruthless tactics when dealing with competitors. Gilded Age Mark Twain labeled the late 1800's ________ to describe the extremes of wealth and poverty (big differences between the rich and the poor). Urbanization Rural (countryside) residents move to urban (inner city) areas in search of jobs. Size of cities increase. How the Other Half Lives Book by Jacob Riis that exposed the living conditions of urban slums (working-class, inner-city neighborhoods). Working Conditions Rapid industrial growth leads to shift from rural to urban lifestyle, widespread use of child labor, and growth of tenements & slums. Immigration Many immigrants traveling to the U.S. settled in urban areas in the North because rapid industrialization created many job opportunities. New Immigrants Came primarily from southern and eastern Europe (Ex: Italy & Russia) between 1890-1915. Were culturally different from the earlier immigrants. Chinese Exclusion Act (1882) Limited the number of Chinese immigrants entering the U.S. An example of Nativism. Nativists Group of Americans who were angry about Immigrants taking jobs from Americans and working for cheaper wages. Trust Titans Business leaders who controlled large monopolies and trusts. Philanthropy The desire to promote the welfare of others, expressed especially by the donation of money to good causes. Gospel of Wealth Philosophy that wealthy individuals have a responsibility to use their wealth for the greater good of society. Industrial Revolution Period of major industrialization that took place during the late 18th and early 19th centuries. Monopolies/trusts Entities that dominate a market and restrict competition. Gentlemen's Agreement Informal agreement between the U.S. and Japan that restricted Japanese immigration. America Expands Between the 1890's and the start of World War I (1914), the U.S. expanded its access to overseas markets and raw materials through the policy of imperialism. Reasons for Imperialism Due to the expansion of American industry during the 1800's, the U.S. needed to obtain raw materials and new markets. Dollar Diplomacy Attempted to increase the U.S. power in Latin America, indicating a U.S. desire to interact with foreign countries in ways that were profitable to U.S. corporations. Economic Nationalism U.S. practices economic nationalism by implementing protective tariffs to help American industry. Protective Tariff A tax on foreign products making them more expensive so people will buy American products instead. Open Door Policy (1899-1900) Issued in order to secure equal trade opportunities in China and guarantee access to its markets. Annexation of Hawaii U.S. annexes (takes over) Hawaii and the Philippines. Spanish American War A conflict in 1898 that resulted in the U.S. obtaining overseas colonies and being recognized as a world power. Yellow Journalism Joseph Pulitzer and William Randolph Hearst used yellow journalism to generate public support for the Spanish American War. Panama Canal Built as a result of the Spanish American War to allow quicker movement between oceans for trade and military security. Progressive Movement A movement to correct the economic and social abuses of industrial society, supporting consumer protection, women's suffrage, and other reforms. Progressives Believed the government needs to regulate big business to protect consumers and workers, opposing the Laissez-faire attitude. Jane Adams A prominent social reformer and activist during progressive era, who established settlement houses that provided assistance to the poor. W.E.B. Du Bois Formed the National Association for the Advancement of Colored People (NAACP) to end segregation and win equal rights. Booker T. Washington Believed that African Americans should pursue education as the key to improving social status and founded a vocational training institution. Labor Union An organization of employees formed to bargain with the employer for better working conditions, benefits, and pay. Clayton Antitrust Act Made unions legal, allowing them to organize and improve conditions. Collective Bargaining Discussions between labor union leaders and management to agree on a contract for workers. Wagner Act (1935) Legalized collective bargaining. Triangle Shirtwaist Company Fire A tragedy where many women workers were killed in a factory fire, drawing national attention to worker safety. Samuel Gompers The person who founded the AFL; Organized workers into unions to strive for better conditions and pay. American Federation of Labor The first long-lasting, successful labor union in the U.S., focusing on the rights of skilled workers. Pure Food & Drug Act (1906) Law that provided federal inspection of meat products and forbade unsafe food products and poisonous medicines. Meat Inspection Act Created sanitary standards established for slaughterhouses and meat processing plants. Muckraker Writers during the progressive era that exposed social ills of inner cities, factory conditions, and political corruption. The Jungle A publication by Upton Sinclair that led Congress to pass the Meat Inspection Act. Upton Sinclair An author known for his muckraking work, particularly The Jungle. Ida M Tarbell A muckraker who focused on issues including the monopoly of Standard Oil. Lincoln Steffens A muckraker who exposed political corruption in cities. Jacob Riis A muckraker known for his work How the Other Half Lives. Booker T Washington An African American educator and leader who advocated for vocational training. WEB Dubois An African American sociologist and civil rights activist who co-founded the NAACP. Nativism A political policy favoring the interests of established inhabitants over those of immigrants. Labor Unions Organizations formed by workers to advocate for better working conditions and wages. Collective bargaining The negotiation process between employers and a group of employees aimed at reaching agreements. Triangle Shirtwaist Fire A tragic industrial disaster that highlighted the need for better workplace safety regulations. AFL The American Federation of Labor, a national federation of labor unions in the United States. Plessy v Fergusun A landmark Supreme Court case that upheld racial segregation under the 'separate but equal' doctrine. Woodrow Wilson The 28th President of the United States who led the nation during World War I. Neutrality A policy of not taking sides in a conflict, adopted by Wilson at the beginning of World War I. Unrestricted submarine warfare A type of naval warfare in which submarines sink vessels without warning. Espionage Act A law enacted in 1917 to prohibit interference with military operations or support for U.S. enemies. Sedition Act A law that made it a crime to criticize the government during World War I. Schenck v. U.S. A Supreme Court case that ruled that freedom of speech could be limited during wartime. Fourteen Points A statement of principles proposed by President Wilson to govern the postwar world. League of Nations An international organization established after World War I to promote peace and cooperation. Isolationism A foreign policy of avoiding involvement in international conflicts, followed by the U.S. in the 1920s and 30s. Treaty of Versailles Congress refuses to sign the Treaty of Versailles because many Senators objected to the U.S. membership in the League of Nations, fearing that it would pull the U.S. into another major war. Washington Naval Conferences Attempts by the U.S. to achieve peace and arms control in the decade after WWI. Kellog-Briand Pact Attempts by the U.S. to achieve peace and arms control in the decade after WWI. Bolshevik Revolution Communist takeover of Russia in 1917 increased nativism leading to the Red Scare (fear of Communism in the U.S. following WWI). Immigration quota acts of 1921 & 1924 Restricted the number of immigrants from Southern and Eastern Europe due to a recurrence of nativist attitudes following WWI. 19th Amendment Women were granted the right to vote during the Progressive Era (1917). Women's suffrage The national effort to ratify women's suffrage was strengthened by the economic opportunities created by World War I. Major female leaders of the women's rights movement Susan B. Anthony, Carrie Chapman Catt, Elizabeth Cady Stanton, and Lucretia Mott. Roaring Twenties The 1920's are called the 'Roaring Twenties' because of widespread social and economic change and changing cultural values. Prohibition Law authorized by the 18th Amendment that banned the manufacture and sale of alcoholic beverages. Sacco and Vanzetti Two immigrant anarchists who were convicted of murder and executed with very little evidence during the height of the Red Scare. Scopes Trial John Scopes was convicted in 1925 for teaching about evolution, illustrating a conflict concerning religious beliefs and scientific theories. Harlem Renaissance African American authors and artists used literature and art to celebrate the richness of their heritage. Flappers Women during the 1920's that rejected traditional feminine roles and refused to conform to society's expectations. Henry Ford Use of the assembly line in the production of automobiles led directly to a decrease in the cost of automobiles. Economic growth during the 1920's Development of many new consumer goods led to rapid economic growth. Automobiles, radio, and motion pictures Standardized American culture and influenced what people considered to be 'American culture'. Red Scare A period of intense fear of Communism in the U.S. following WWI. Cultural conflict in the 1920s Illustrated by the Scopes Trial and the Harlem Renaissance, reflecting tensions between traditional values and modern ideas. Consumer Culture Emergence of a culture where buying is encouraged by advertising and installment payments. Installment Buying Paying for something a little at a time rather than all at once. Stock Speculation Heavy increases in stock investments driven by a belief in never-ending prosperity. Government's Role in the Economy (1920s) Prevailing view that the government should interfere as little as possible. Warren G. Harding President who called for 'a return to normalcy' and advocated for reduced international involvement and less government regulation of business. Calvin Coolidge President who believed the economy functions best if government allows business to operate freely. Overproduction of Farm Crops Demand for American farm goods dropped dramatically during the 1920s due to decreased European need for imports. Dust Bowl Environmental disaster caused by over-farming and severe drought, leading to increased westward migration. Stock Market Crash of 1929 Considered the start of the Great Depression, largely caused by speculators buying stocks on margin. Decline in Farm Prosperity A significant decrease in the economic well-being of farmers during the Great Depression. Overproduction and Underconsumption Situation where U.S. businesses produced more products than the population could buy, leading to low consumer demand. Global Financial Interdependence Evidence that economies worldwide are interconnected; if one falls, they all fall. Herbert Hoover President of the U.S. at the start of the Great Depression, whose policies favored big business. Hoovervilles Nickname for poor communities due to Hoover's refusal to provide direct federal aid to the homeless. Bonus Army WWI veterans who marched on Washington demanding payment for their services. Franklin Delano Roosevelt (FDR) President who won an easy victory over Hoover in 1932, advocating for government intervention in economic problems. Court Packing FDR's proposal to increase the size of the Supreme Court to make it favorable to New Deal laws. Deficit Spending Used by FDR to stimulate economic growth. FDR Reelected to 3rd Term Controversial event in 1940 as it challenged the tradition of presidents stepping down after two terms. FDR's reelection to 3rd term Eventually led to the establishment of presidential term limits. New Deal Most immediate goal was to provide work for the unemployed. Public works jobs Tried to stimulate economic recovery by creating public works jobs. Social welfare programs Were expanded during the New Deal. Government involvement Increased government involvement with both business and labor. Agricultural Adjustment Acts Designed to increase prices of farm products by reducing farm output. Tennessee Valley Authority (TVA) Created in 1933 to improve economic conditions in a poor rural region. Social Security Act 1935 Considered an important program because it extended support to elderly/retired citizens. Federal Deposit Insurance Corporation (FDIC) Tried to restore public confidence in banks by safeguarding savings. Bank holiday (1933) Declared to restore confidence in the nation's banks. WPA Intended to help unemployed workers. Civilian Conservation Corps (CCC) Intended to help unemployed workers. National Labor Relations Act (Wagner Act) Strengthened labor unions by legalizing collective bargaining. Opposition to New Deal The strongest opposition came from business leaders. Laissez-Faire The tradition that government shouldn't interfere with the economy. Critics of the New Deal Claimed the TVA and Social Security System threatened the U.S. economy by applying socialist principles. Impact of New Deal Raised national debt and expanded the power of the Federal Government. Political thinking change Supported the idea that the government should become more involved in the social and economic life of the people. WWII start Started when Germany invaded Poland in 1939. U.S. Neutrality In the 1930's, the primary objective was to avoid involvement in Asian and European conflicts. Neutrality Acts Passed in mid 1930's to avoid mistakes that led to WWI. Lend-Lease Act Efforts to help the Allies without formally declaring war. Bombing of Pearl Harbor Brought the U.S. directly into World War II. Totalitarian aggression The U.S. became involved to fight totalitarian aggression from Germany, Italy, and Japan. D-Day Invasion June 1944- Important to the outcome of WWII because it opened a new Allied front in Europe (Germany had to fight enemies from the East and West instead of just the East). Key challenge faced by the U.S. during WWII Fighting the war on several fronts (Europe and Asia). U.S. and Soviet Union cooperation during WWII Supports the idea that alliances are built upon mutual self-interest (the U.S. and Soviet Union were enemies but formed an alliance because they were both enemies with Germany). 1944 election of FDR Can be attributed to the unwillingness of voters to change leadership during a major crisis. FDR's personal diplomacy during WWII Strengthened the President's role in shaping U.S. foreign policy. Women in wartime industries Women replaced men in essential wartime industries. Economic opportunities for women during WWII Expanded for women. Post-war job situation for women Many working women left their factory jobs because they were forced to give up their jobs to returning war veterans. Migration of African Americans during WWII More African Americans migrated to large cities because industry was expanding. GI Bill (1944) Extended educational and housing opportunities to war veterans. Provided federal funds for veterans to attend college. Rationing during WWII Ordered by the U.S. government to conserve raw materials for the war effort. Funding WWII The U.S. government relied heavily on the sale of war bonds (lends from citizens to help fund the war. Also contributed to the national debt). Economic impact of WWII on the U.S. Accelerated its recovery from the Great Depression. Korematsu v. U.S. The U.S. government considered Japanese Americans a threat to national security during WWII, causing them to place Japanese Americans in confinement in internment camps. Supreme Court ruling on Japanese internment Said that the removal of Japanese Americans from their homes was constitutional because this type of action was necessary during a national emergency. Wartime conditions and civil liberties Supreme Court ruled that wartime conditions justified limitations being placed on civil liberties. Impact of WWII on Japanese Americans Many Japanese lost their homes and businesses. President Harry Truman's decision on atomic bombs Decided to drop atomic bombs on Japan (Hiroshima & Nagasaki). Truman's use of atomic weapons Decided to use atomic weapons against Japan in order to end the war while limiting the loss of American lives. Truman's impact on civil rights Advanced the cause of civil rights for African Americans by ordering the desegregation of the Armed Forces (Black and White troops fight together and are no longer separated). Truman Doctrine Originally designed to contain communism by giving aid to Greece and Turkey (later expanded by Eisenhower). Truman and General MacArthur Relieved General Douglas MacArthur of his command in the Korean conflict because General MacArthur challenged the concept of civilian control over the military. Loyalty checks during Truman's presidency Required loyalty checks due to the fear of communist influence in government. Nuremberg Trials Held to make German leaders accountable for the Holocaust (mass genocide against Jews and other minorities). Established the principle that leaders of a nation may be held accountable (put on trial) for crimes against humanity/ war crimes. United Nations Replaced the League of Nations in order to prevent international disputes from escalating into major wars. Marshall Plan (1948-1952) U.S. provided economic aid in order to help Europe's economic recovery after WWII. U.S. foreign policy after WWII Changed as the U.S. became more involved in world affairs. Eleanor Roosevelt's contribution Helped create the United Nations Universal Declaration of Human Rights. Post-WWII economic growth In the decade after WWII, rapid growth in personal income contributed to the expansion of the middle class. Appeasement A diplomatic policy aimed at avoiding conflict by making concessions to an aggressor. African Americans in WW2 Refers to the contributions and experiences of African Americans during World War II. Rosie the Riveter A cultural icon representing women who worked in factories and shipyards during World War II; used as a poster in order to recruit women Japanese Internment The forced relocation and incarceration of Japanese Americans during World War II. Rationing The controlled distribution of scarce resources, goods, or services during wartime. Pearl Harbor The site of the surprise military attack by the Japanese on December 7, 1941, leading the U.S. to enter WWII. War Bonds Debt securities issued by a government to finance military operations during times of war. Manhattan Project A secret U.S. project during World War II that developed the first nuclear weapons. Desegregation of the Military The process of eliminating racial segregation within the United States Armed Forces. United Nations (UN) An international organization founded in 1945 to promote peace, security, and cooperation among countries. Selective Service The system by which men are registered for military conscription in the United States. Lend Lease A U.S. program during WWII that supplied Allied nations with vast amounts of war material. NATO North Atlantic Treaty Organization, a military alliance formed in 1949 for mutual defense against aggression. Cold War An era of political tension and military rivalry between the U.S. and Soviet Union from 1946 to 1989. Baby Boom A significant increase in the birth rate following WWII, particularly in the 1950s and 1960s. Iron Curtain The boundary dividing Europe into two separate areas of political influence during the Cold War. Sputnik Launch The 1957 launch of the first artificial satellite by the Soviet Union, marking the start of the space race. Containment A U.S. policy aimed at preventing the spread of communism during the Cold War. Berlin Airlift The U.S. operation to supply West Berlin after the Soviet blockade in 1948-1949. McCarthy Era A period of intense anti-communist suspicion in the U.S. during the early 1950s. Senator Joseph McCarthy A U.S. senator known for leading the anti-communist witch hunts during the McCarthy Era. McCarthyism The practice of making accusations of subversion or treason without proper evidence. Korean War A conflict from 1950 to 1953 between Communist North Korea and South Korea, supported by the U.S. and UN. United Nations military force First time the United Nations used military force to oppose aggression. General Douglas MacArthur Relieved of command in the Korean War for threatening civilian control of the military. Presidential wartime powers Expanded during the Korean War. Outcome of the Korean War Korea continued to be a divided nation. Vietnam War Civil war between Communist North Vietnam and U.S.-backed South Vietnam. Domino Theory Idea that if one country falls to communism, others around it will as well. Vietnam War protests Significant protests in the U.S. including Berkeley demonstrations and Kent State protest. 26th Amendment Lowered the voting age to 18 as a result of U.S. participation in the Vietnam War. War Powers Act 1973 Limited the president's ability to send troops into combat abroad. Public opinion on foreign policy Showed that foreign policy can be altered by public opinion. Trust in government Greater public distrust of governmental policies post-Vietnam War. Military technology and victory U.S. experience in the Vietnam War showed that superior military technology does not guarantee victory. Peace Corps Established by President John F. Kennedy to support developing nations. Bay of Pigs Invasion 1961 Kennedy's effort to remove Fidel Castro from power in Cuba, considered his most significant foreign policy failure. Cuban Missile Crisis 1962 Soviet Union placed nuclear weapons in Cuba; Kennedy imposed a naval blockade. Nuclear Test Ban Treaty Negotiated by Kennedy to limit nuclear testing following the Cuban Missile Crisis. New Frontier Kennedy's program that expanded the U.S. space program. Détente Policy to ease tensions between the U.S. and Soviet Union. Strategic Arms Limitations Talks (SALT) Part of the presidential policy of détente aimed at reducing world tensions. Nixon's visit to China 1972 Attempt to reduce tensions between the U.S. and Communist China. Watergate Scandal Break-in at the Democratic National Committee headquarters leading to Nixon's resignation. Trust in elected officials Undermined as a lasting effect of the Watergate scandal. Executive privilege Weakened as a result of the Watergate scandal. Nixon (1974) Supreme Court case that directly limited the president's power of executive. Civil Rights Movement Movement to end segregation based on race during the 1960's. Civil Disobedience Nonviolent attempts to oppose segregation, such as lunch counter sit-ins and freedom riders. Jackie Robinson Broke color barrier in Major League Baseball. President Truman's Executive Order Desegregated armed forces. NAACP National Association for the Advancement of Colored People, focused on higher education, full political participation, and continued support for civil rights. Brown v. Board of Education of Topeka Required the integration (desegregation) of all public schools in the U.S. and overturned Plessy v. Ferguson ruling. Eisenhower's Federal Troops Sent into Little Rock, Arkansas in 1957 to enforce a Supreme Court decision to desegregate public schools. Martin Luther King Jr. Leader of the civil rights movement during the 1960's, advocated for nonviolent protest. Malcolm X Civil rights leader during 1950's and 60's that advocated black separatism. Rosa Parks Practiced civil disobedience by refusing to give up her seat on a bus to a white man in Montgomery, Alabama. Civil Rights Act 1964 Passed to correct racial and gender discrimination and ended Jim Crow laws. Voting Rights Act 1965 Removed the literacy test as a voting qualification to eliminate racial barriers within voting. Affirmative Action Programs Main goal is to promote economic gains for minorities and women. Fair Housing Act Government efforts to end discrimination against various groups. Americans with Disabilities Act Government efforts to end discrimination against individuals with disabilities. Chief Justice Earl Warren Followed a policy of judicial activism and expanded individual rights in criminal cases. Supply-Side Economics Lowered tax rates on personal and business income and supported economic changes favoring big business. Trickle Down Economics Believed that economic growth depends on making increased amounts of capital available to business. National Debt in the 1980s Increased greatly due to the Federal Government's reliance on deficit spending. Reagan's Federal Budget Proposals Came under criticism for including very large deficits. Involvement in World Affairs in the 1980s Based on a concern for advancing the nation's self-interest. North American Free Trade Agreement (NAFTA) Increased commerce and eliminated tariffs. Encouraged countries to participate in the global economy. Reflected the U.S. commitment to globalization. Persian Gulf War A direct result was that the U.S. liberated Kuwait from Iraqi control. Election of 2000 George Bush won even though Al Gore received more popular votes, because of the way the Electoral College votes came out. USA Patriot Act Increased government surveillance of citizens, increased cooperation between law enforcement and intelligence. War on Terror War in Afghanistan against Taliban and Al Qaeda. War in Iraq Saddam Hussein accused of having WMD's and wouldn't allow inspection. Barrack Obama First African-American elected to the Presidency. Obamacare Passed major health insurance reform package. September 11, 2001 terrorist attacks Attacks on World Trade Center and the Pentagon. Rise of the Tea Party Extreme right wing conservatives opposed to most government spending. Supply-side economics Economic theory that advocates reducing taxes and decreasing regulation to stimulate economic growth. George Bush Committed U.S. troops to the Persian Gulf War to assure the flow of Middle East oil to the U.S. and its allies. Bill Clinton Supported NAFTA because it would stimulate economic growth in the U.S. U.S. troops in Haiti and Bosnia Sent during the 1990's to stop conflicts within those nations. Bombing of Kosovo Participated in 1999 because of human rights violations. Economic stimulus package Passed by Barrack Obama to prop up the economy. Withdrawal of American troops Began from Iraq and Afghanistan under Barrack Obama. Mission to find Osama bin Laden Ordered by Barrack Obama that resulted in the killing of Al Qaeda leader.

The Problem of Scarce Resources

Economics Study Guide: Supply, Demand, and Macroeconomic Principles Short-Answer Questions (2-3 sentences each): What is the fundamental concept of economics, and how does it relate to scarcity? Explain the law of demand. What is the relationship between price and quantity demanded? What are two factors besides price that can influence the demand for a product? Give a brief example of each. Describe the law of supply. How does it differ from the law of demand? What is market equilibrium, and why is it significant in economics? How do you calculate total revenue for a product? What is a normal good, and how does its demand respond to changes in income? Define substitutes and complements in the context of economics. Provide an example of each. Explain the difference between a shift in demand and a movement along the demand curve. What is GDP, and why is it considered a key indicator of a country's economic performance? Short-Answer Key: Economics is the study of how individuals, businesses, and societies make choices about how to allocate scarce resources to satisfy their unlimited wants and needs. It centers on the problem of scarcity, meaning there are limited resources available to meet our desires. The law of demand states that, all else being equal, as the price of a good or service increases, the quantity demanded decreases, and vice versa. This inverse relationship implies that consumers are generally willing to buy more at lower prices. Two factors influencing demand are income and consumer preferences. For example, if people's incomes increase, they might demand more luxury goods. Alternatively, a shift in consumer preference toward healthier lifestyles might increase demand for organic foods. The law of supply states that, all else being equal, as the price of a good or service increases, the quantity supplied increases, and vice versa. Unlike the inverse relationship in the law of demand, the law of supply shows a positive relationship, where producers are more willing to supply goods or services at higher prices. Market equilibrium is the point where the quantity demanded of a good or service equals the quantity supplied. At this point, the market is stable because there are no surpluses or shortages, and prices tend to remain constant. Total revenue is calculated by multiplying the price of a product by the quantity supplied (Total Revenue = Price x Quantity Supplied). It represents the total receipts a seller can obtain from selling goods or services. A normal good is a good whose demand increases as consumer income rises. This means that as people earn more, they tend to purchase more of these goods. Substitutes are goods that can be used in place of one another. For example, Coke and Pepsi are substitutes. Complements are goods that are consumed together. For example, cars and gasoline are complements. A movement along the demand curve occurs solely due to a change in the price of the good itself. In contrast, a shift in demand is caused by factors other than price, such as changes in income, consumer preferences, or the prices of related goods, leading to a completely new demand curve at every price level. GDP (Gross Domestic Product) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. It serves as a comprehensive indicator to measure a country's economic health and standard of living. Essay Questions: Explain the concept of equilibrium in a competitive market. How do the forces of supply and demand interact to determine the equilibrium price and quantity? What happens to equilibrium price and quantity when there is a change in supply or demand? Discuss the factors that can cause a shift in the demand curve. Illustrate your answer with examples of events that could shift the demand curve for coffee to the right. Explain the difference between a change in quantity supplied and a change in supply. What factors can cause a change in supply? Illustrate your answer with examples of events that could shift the supply curve for wheat to the left. What is economic inequality, and what are some of its potential causes and consequences? How can governments address economic inequality through policies and interventions? Define GDP and explain its components. Discuss the limitations of GDP as a measure of societal well-being. What are some alternative indicators that can be used to assess a country's progress beyond economic growth? Glossary of Key Terms: Economics: The study of how people make decisions in the face of scarcity. Scarcity: The fundamental economic problem that arises because resources are limited while human wants and needs are unlimited. Demand: The amount of a good or service that consumers are willing and able to buy at a given price. Quantity Demanded: The specific amount of a good or service that consumers are willing and able to buy at a particular price. Law of Demand: The principle that, all else being equal, there is an inverse relationship between the price of a good and the quantity demanded. Supply: The amount of a good or service that producers are willing and able to sell at a given price. Quantity Supplied: The specific amount of a good or service that producers are willing and able to sell at a particular price. Law of Supply: The principle that, all else being equal, there is a positive relationship between the price of a good and the quantity supplied. Equilibrium: A state in which the forces of supply and demand are balanced, resulting in stable prices and no surpluses or shortages. Equilibrium Price: The price at which the quantity demanded of a good or service equals the quantity supplied. Equilibrium Quantity: The quantity of a good or service bought and sold at the equilibrium price. Total Revenue: The total amount of money received by a seller from the sale of a good or service, calculated as price times quantity sold. Normal Good: A good for which demand increases as income increases. Inferior Good: A good for which demand decreases as income increases. Substitutes: Goods that can be used in place of one another. Complements: Goods that are consumed together. Shift in Demand: A change in the quantity demanded at every price; represented by a shift of the entire demand curve. Movement Along the Demand Curve: A change in the quantity demanded of a good that is caused only by a change in that good’s by price. GDP (Gross Domestic Product): The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. Economic Inequality: The unequal distribution of income and wealth within a society. Market Dynamics: Economics is the study of how individuals and societies utilize scarce resources to satisfy their needs and wants. A fundamental concept in economics is the interaction between supply and demand within a market. Demand: Represents the quantity of a good or service that consumers are willing and able to purchase at various prices. Law of Demand: As price increases, quantity demanded decreases, and vice versa. ("Economics AI") Factors influencing demand include: Price Income Prices of related goods (substitutes and complements) Tastes and preferences Expectations Population changes Supply: Represents the quantity of a good or service that producers are willing and able to offer at various prices. Law of Supply: As price increases, quantity supplied increases, and vice versa. ("Economics AI") Factors influencing supply include: Natural conditions Input prices Technology Government policies Equilibrium: The point at which supply and demand intersect, determining the market price and quantity. At equilibrium, there is no surplus or shortage. ("Economics2e-Ch03.pdf") II. Factors Affecting Supply and Demand: Demand:A shift in the demand curve occurs when factors other than price change the quantity demanded at every price level. ("Economics2e-Ch03.pdf") For example, an increase in income for a normal good will shift the demand curve to the right, indicating a higher quantity demanded at each price point. ("Economics JOURNAL: WORD") Conversely, a decrease in income for an inferior good will increase demand. ("Economics2e-Ch03.pdf") Substitute goods see increased demand when the price of the original good rises. ("Economics JOURNAL: WORD") Complementary goods experience higher demand when the price of the related good falls. ("Economics JOURNAL: WORD") Supply:Similar to demand, a shift in the supply curve happens when non-price factors alter the quantity supplied at all price levels. ("Economics2e-Ch03.pdf") Adverse natural conditions can decrease supply (shift the curve left), as illustrated by the example: "if it snows I can't grow weed". ("Economics JOURNAL: WORD") Technological advancements can increase supply (shift the curve right) by making production more efficient. ("Economics2e-Ch03.pdf") III. Macroeconomic Perspectives and Measuring Economic Performance: Gross Domestic Product (GDP): GDP is the total value of all final goods and services produced within a country during a specific period. It serves as a measure of a nation's economic size and overall health. ("Economics2e-Ch19.pdf") Components of GDP: GDP can be measured by analyzing the demand side (consumption, investment, government spending, and net exports) or the production side (durable goods, nondurable goods, services, structures, and changes in inventories). ("Economics2e-Ch19.pdf") Nominal GDP: GDP measured in current prices, not adjusted for inflation. Real GDP: GDP adjusted for inflation, providing a more accurate picture of economic growth over time. To calculate Real GDP, the formula is: "Real GDP = Nominal GDP / Price Index / 100". ("Economics2e-Ch19.pdf") GDP per capita: GDP divided by population, used to compare economic output on a per-person basis across countries. ("Economics2e-Ch19.pdf") Economic Growth and Convergence: Sustained economic growth is crucial for raising living standards. Even small growth rates compounded over time lead to significant changes in well-being. ("Economics2e-Ch20 (1).pdf") Economic convergence suggests that economies with lower per capita incomes tend to grow at faster rates than richer economies, potentially leading to a narrowing of the gap in living standards. ("Economics2e-Ch20 (1).pdf") Monetary Policy: Central banks, such as the Federal Reserve in the United States, use monetary policy tools to influence the money supply and interest rates to achieve macroeconomic objectives. ("Economics2e-Ch28.pdf") Open market operations: Buying or selling government bonds to influence the money supply. Reserve requirements: Setting the percentage of deposits banks must hold as reserves. Discount rate: The interest rate charged by the central bank to commercial banks for loans. Fiscal Policy: Government use of spending and taxation to influence the economy. ("Economics2e-Ch30 (1).pdf") Budget deficit: Occurs when government expenditures exceed revenues in a fiscal year. National debt: The cumulative amount of money the government owes to its creditors. IV. International Trade and Comparative Advantage: Absolute advantage: When a country can produce more of a good with fewer resources than another country. ("Economics2e-Ch33.pdf") Comparative advantage: A country has a comparative advantage when it can produce a good at a lower opportunity cost than another country. This forms the basis for gains from trade. ("Economics2e-Ch33.pdf") Specialization and trade allow countries to consume beyond their production possibilities frontiers, resulting in mutual benefits. ("Economics2e-Ch33.pdf") This briefing doc provides an overview of core economic principles, market dynamics, and macroeconomic concepts. It highlights the interplay of supply and demand, factors influencing economic growth, the role of monetary and fiscal policies, and the benefits of international trade based on comparative advantage.

Economics Microeconomics September: The Basic Economic Problem: Opportunity cost- Cost of the next best alternative. Economic goods- Scarce resources Free goods- Resources that are not scarce Resources are scarce but the wants are finite. This causes economics agents to make choices: they must allocate scarce resources between competing uses. Therefor the basic economic problem is one of scarcity and choice. There are limited resources on earth and therefore these are known as Scarce Resources. There are four factors of production which are resources used in the production process. These are land, labour, capital and enterprise. They also all have associated costs or rewards. Land- All natural resources (rent). Labour- The physical and mental work of people (wages). Capital- Imputs that help to create consumer goods. Enterprise- The human capital involved with organizing factors of production and taking risk (profit). Entrepreneurs--- taking risk---rewards A positive statement is something that can be tested. Normative statement is instead based on opinion or subjective values. CELL: Capital, Enterprise, Land, Labour Opportunity cost: Opportunity Cost can be illustrated by using Production, Possibility, Frontiers that show the effects of making an economic choice. OC= the cost of the next best alternative forgone Work-leisure choices- The opportunity costs of deciding not to work an extra ten hours a week is lost wages given up. Production possibility frontiers: Opportunity cost can be illustrated by using Production Possibility's Frontiers that show the effects of making an economic choice. A PPF shows the maximum possible output combinations of two goods or services that an economy can achieve when all resources are fully and efficiently employed. Opportunity cost: The opportunity cost of producing more of one good is the amount of other goods that must be given up. The slope of the PPF represents the opportunity cost of switching from producing one good to producing another If it’s a straight-line opportunity cost is the same. Capital goods are used to make consumer goods and services. Capital inputs include fixed plant and machinery, hardware, Sofware, new factories and other buildings. Consumer durables- Products that provide a steady flow of satisfaction/ utility over their working life. (washing machine or phone). Consumer non- durables- Products that are used up in the fact of consumption (drinking coffee). Consumer services- haircut or a ticket to a show. Free Market Economy: A free-market economy is characterized by minimal government intervention in economic activities. In such economies, prices are determined by supply and demand forces in the marketplace. Private individuals and businesses own and control the means of production and make economic decisions. Competition is a central feature of a free market economy, which is believed to drive innovation and efficiency. Key examples of countries with free market economies include the United States and Hong Kong. Mixed Economy: A mixed economy combines elements of both market and command economies. In a mixed economy, the government plays a role in regulating and overseeing certain economic activities, such as healthcare, education, and infrastructure. Private individuals and businesses still operate freely in markets for goods and services, but the government intervenes to address market failures and ensure public welfare. Many developed countries, including the United Kingdom and Canada, have mixed economies. Command Economy: A command economy is characterized by extensive government control over economic activities. In such economies, the government owns and controls the means of production and determines what goods and services are produced, how they are produced, and for whom they are produced. Prices are often set by the government, and there is limited room for individual decision-making in economic matters. Historically, the Soviet Union and North Korea were examples of command economies. Shifts in PPF: Causes of an inward shift on an economy's PPF- Natural disasters, large scale net outward labour migration, Destruction/ loss of factor inputs caused by civil war, A trend decline in the productivity of inputs perhaps caused by a persistent recession which causes net investment to be negative. Specialization- When an economy concentrates on a specific product or task. Specialization happens at all levels of economic activity. Division of Labour- Where production is broken down into many separate tasks. Division of labour can raise output per person as people become proficient through constant repetition of a task. This is called “learning by doing”. This gain in productivity helps to lower the supply cost per unit. Production- Volume of output over a given period Productivity- efficiency of production, output achieved with a given number of inputs. Unrewarding repetitive work that requires little skill can lower motivation and eventually causes lower productivity. Workers may take less pride in their work and quality suffers. Dissatisfied workers become less punctual at work and the rate of absenteeism increases. Sectors of industry: Primary- Raw materials are extracted and food is grown Secondary- raw materials are transferred into goods Tertiary- Finished goods available for sale/production of services The four functions of money: A medium of exchange- To buy and sell goods. A measure of value- a unit of account. This can be affected by high inflation. A store value- links the present and future value. This can be negatively impacted by very high inflation. A method of deferred payment- credit and borrowing- the accepted way, in markets of settling a debt. Forms of money: Cash- Notes and coins, a perfect medium of exchange, but affected by inflation. Money in current accounts- Cash on demand and debit cards but there is not a perfect medium of exchange as they can be declined. Near monies- Assets that fulfil some but not all the functions of money but are not a medium of exchange for example an (ISA) Non money financial asset- All financial assets can be turned into money (house). Utility- Maximising agents' economic welfare is often referred to or measured by the concept of utility: the satisfaction or benefit derived from consuming a goof or set of goods. Consumer- want to maximise their purchasing power Workers- Want to maximise their own welfare at work. Firms- Want to maximise the utility of ownership. Governments- are assumed to want to maximise the economic welfare to their citizens. Neo-Classical Theory- A theory of economics which typically starts with the assumption that economic agents will maximise their benefits and act rationally. Homo economicus is based on the idea that people are rational and self-interested and make descions based on maximizing their own utility or satisfaction. Margin- Assumes that all decisions are taken in isolation. Margin Benefit (MB)- This refers to the additional benefit gained from producing or consuming one more unit of a good or service. Marginal cost (MC)- This represents the additional cost incurred that comes from making or producing one additional unit. Demand- The quantity of goods or services that consumers are willing and able to buy at a given price in a given time period. Derived demand is the demand for a factor of production used to produce another good or service. Composite demand is where goods have more than one use. Veblen goods- People will by item when they are scarce. Giffen good- low-income, non-luxury product for which demand increases as the price increases. Causes of shifts in the Demand Curve: Changing prices of a substitute goods Changing prices of a complements Changes in the real income of consumers Seasonal factors Social and emotional factors Interest rates Market shocks (recession, commodity prices(oil) P-Population I-Income R-Related goods A-Advertising T-Tastes E-Expectations S-Seasons Other factors can also cause demand for a product to change these are called conditions of demand. The law of diminishing marginal utility explains that as a person consumes more of an item or product, the satisfaction (utility) they derive from the product. Consumer surplus- the difference between how much buyers are prepared to pay for a good and what they pay. Supply: Supply- Shows the quantity of a goods that suppliers are willing to sell at any given price. When supply is affected by price changes, this is known as movement along the curve. P-Productivity I-Indirect Taxes N-Number of firms T-Technology S-Subsidies W-Weather C-Cost of production These conditions can cause a shit in the supply curve to the left or the right. Price determination: Equilibrium means a state of equality or balance between market demand and supply. Prices where demand and supply are out of balance are called points of disequilibrium. Equilibrium price- Where planned demand equals planned supply. Price has three important functions in allocating resources in a market. Rationing- Prices serve to ration scarce resources when market demand outstrips supply. Signalling- Prices adjust to demonstrate where resources are required, and where they are not. Incentives- Price acts as an incentive for buyers and sellers-buyers and sellers behave rationally and will want to maximise utility. Allocation of recourses R-Rationing S-Signalling I-Incentive Producer and Consumer Surplus: Consumer surplus- is a measure of the welfare that people gain from consuming goods and services. Producer surplus is the difference between two price levels Midpoint= Allocative Efficient Price Elasticity of demand- The responsiveness of change in quantity demanded in relation to a change in price. What factors determine PED: Number of close substitutes for consumers Price of the product in relation to total income Cost of substituting between different products Brand loyalty and habitual consumption Degree of necessity/ luxury S-ubsitutes (number of close alternatives) P-ercentages of income L-uxary/ necessity A-addictive/ habit forming T-ime Elastic only irritates skin Elastic- Opposite, inelastic same Income Elasticity of Demand: Income Elasticity of Demand- The responsiveness of change in quantity demanded in relation to changes in income. YED Inferior v Normal good Example; Normal good- Fresh vegetables Inferior good- Tinned vegetables A normal good will always have a positive income elasticity because quantity demanded and income either both increase or both decrease. An inferior good, however will always have a negative elasticity because the signs on the top and bottom of the formula will always be opposite. Cross elasticity of demand (XED): Cross elasticity of demand measures the proportionate response of the quantity demanded of one good to the proportionate change in the price of another. For example, it is a measure of the extent to which demand for pork increases when the price of beef goes up. Substitutes: Substitutes are products in competitive demand. With substitutes, an increase in the price of one good (cetirus paribus) will lead to an increase in demand for a rival product. The value of XED for two substitutes is always positive. Complements: Complements are products in join demand A fall in price of one product causes an increase in demand for the complementary prod uct. The value of XED for two complements is always negative. XED <0 (negative) Complements >0 (positive) Substitutes 0 Unrelated goods Price elasticity of supply (PES): Definition- measures the proportional change in quantity supplied due to a proportional change in price. If supply is elastic, producers can increase their output without a rise in cost or a time delay. If supply is inelastic, firms find it hard to change their production in a time period. Factors determining PES: Time scale Spare capacity Level of stock Barriers to entry market Indirect and direct taxes: January Why does the government impose taxes on society- Governments put taxes on society for lots of different reasons. Firstly, taxes are a primary source of revenue to fund public services and infrastructure such as education, healthcare, defence, and public safety. Secondly, taxes are used to redistribute wealth and help with economic inequalities by collecting more from those with higher incomes and providing support to those in need. Difference between direct and indirect taxation- Direct Taxation: Definition: Direct taxes are directly on individuals and these taxes cannot be given to someone else. The person on who the tax is must pay it Examples: Income tax, corporate tax, property tax, and wealth tax are examples of direct taxes. Indirect Taxation: Definition: Indirect taxes are put on goods and services and the tax can be shifted from the person who pays the tax to someone else. The final consumer often has to pay the tax. Examples: Value Added Tax (VAT), goods and services tax (GST), excise duties, and customs duties are examples of indirect taxes. Difference between progressive, regressive and proportional taxes- Progressive Taxation: Definition: In a progressive tax system, the tax rate increases as the taxable income of an individual rises. Higher-income individuals pay a higher percentage of their income in taxes compared to lower-income individuals. Example: A progressive income tax might have different tax brackets, with higher rates applied to higher income levels. Regressive Taxation: Definition: In a regressive tax system, the tax falls disproportionately on lower-income individuals or households. As income increases, the percentage of income paid in taxes decreases. Example: Sales taxes are often seen as regressive because everyone pays the same rate on purchases regardless of their income, and this can represent a larger proportion of income for lower-income individuals. Proportional Taxation (Flat Tax): Definition: Proportional taxation, also known as a flat tax, imposes the same tax rate on all individuals or entities, regardless of their income. The tax burden is proportional to income, meaning everyone pays the same percentage of their income in taxes. Example: If there is a flat income tax rate of 10%, everyone, regardless of income level, pays 10% of their income in taxes. What is meant by a “Pigouvian tax”- A Pigouvian tax is put on things that cause problems for others, like pollution. The goal is to make the people and businesses doing these things think about the wider impact. By adding the extra cost of these problems to the price of things, Pigouvian taxes want to make sure that what people and businesses do is good for everyone. This way of doing things helps the economy work better and helps take care of the environment by stopping harmful actions and encouraging better choices for everyone. Indirect taxes and subsidies: Ad Valmore tax- Increases in proportion to the value of the base tax (the price of the good). Specific tax is tax that does not change with the value of the good, but the amount or volume purchased (a bottle of wine). Excise duties in the UK are indirect taxes levied on three major categories of goods- alcoholic drinks, Tobacco products and road fuels Indirect taxes and Elasticity: When demand is elastic (PED>1) the incidence of tax will be greater for a supplier than consumer. When demand is perfectly elastic (PED= infinity), the incidence will fall on suppliers. When demand is more inelastic (PED<1), the incidence of the tax paid by the consumer will be bigger and the incidence of tax on the producer will be smaller. When demand is perfectly inelastic (PED=0), the incidence will fall on consumers. Q-Question Using an example explain why the government imposes specific taxes on many goods and services. Answer-The government imposes specific takes on society to try reducing the amount of demand on these goods and services. An example of this could be the high tax on cigarettes. This could also be known as a Pigouvian tax the government do this to reduce the negative impacts on society. For example, smoking cigarettes links directly with bad health putting more pressure on the nhs. The more inelastic the more consumers are going to benefit the more elastic the more producers are going to benefit. Government subsidy- Is a form of financial support offered to producers and occasionally consumers. Subsidies to producers reduce the marginal cost of supply. Justifications for Subsidies: Helping poorer families with food and childcare costs Improved nutrition can lift labour productivity and reduced the burden on health services. Drawbacks of subsidies: Producers can be “subsidy dependent” Subsidy can distort resources allocation Environmental risks from excessive production Subsidies are difficult to remove Effects of subsidies: Subsidies increase output and lower prices for consumers which could help families on low and fixed incomes. (Reduces inequality) They could help boost demand during periods of economic decline. Market failure: Market failure is when the free market fails to allocate recourse to the best interests of society, leading to an inefficient allocation of scare recourses. Information failure- Occurs when people have inaccurate or incomplete data and so make potentially “wrong choices”. Long- term consequences- Information gaps about long term benefits of cots of assuming a product. Complexity- Information failure when a product is highly complex. Unbalanced knowledge- When the buyer may know or then the seller or vis versa. Price inforation- When consumers are unable to quickly/ cheaply find sufficient information on the best prices for different products. Asymmetric Information- This occurs when somebody knows more than somebody else in the market. Private and Social Costs/ Benefits: Private Costs: Definition: Private costs are the expenses or negative consequences incurred by an individual or a firm in producing or consuming a good or service. Example: If you decide to buy a car, the private costs will include the actual cost of the car, insurance, fuel, maintenance, etc. Private Benefits: Definition: Private benefits are the gains or positive outcomes experienced by an individual or a firm because of producing or consuming a good or service. Example: Continuing with the car example, the private benefits would include the convenience of transportation, the enjoyment of driving, and the satisfaction of owning a vehicle. External Costs: Definition: External costs are the negative side effects or expenses that result from an economic activity but are not borne by those directly involved in the activity. Example: If a factory pollutes a river while producing goods, the cost of cleaning up the pollution and its impact on the health of nearby residents are external costs because the factory and the consumers do not directly pay for these consequences. External Benefits: Definition: External benefits are the positive side effects or advantages that result from an economic activity but are not directly enjoyed by those involved in the activity. Example: Planting trees in a neighbourhood not only beautifies the area but also provides cleaner air for everyone. The improved air quality is an external benefit because individuals who didn't plant the trees still enjoy the positive impact. Marginal private cost (MCP)- Cost to the producing firm of producing an additional unit of output. Marginal social cost (MSC)- Total cost of society to producing an extra unit of output. (MSC=MPC+ MEC) Marginal private benefit (MPB)- Benefit to the consumer of consuming an additional unit of output. Marginal social benefit (MSB)- Total benefit to society from consuming an extra unit. (MSB=MPC+MEC) Deadweight= triangle-Deadweight loss is an unrecoverable cost to society. The key problem is that often, economic agents do not take account of the costs their decisions impose on others. The market fails to price negative externalities properly leading to a misallocation of recourses from a social perspective. When a tax is imposed the external costs are seen to be internalised between producer and consumer. Positive Externality: Definition: A positive externality occurs when the benefits of an economic activity spill over to third parties who are not directly involved in the activity. Example: Education is a classic example of a positive externality. When an individual gets educated, not only do they benefit by gaining knowledge and skills, but the society benefits from having a more educated and skilled workforce, leading to higher productivity and economic growth. Negative Externality: Definition: A negative externality occurs when the costs of an economic activity are imposed on third parties who are not directly involved in the activity. Example: Pollution is a common negative externality. When a factory releases pollutants into the air or water, it may harm the health of people living nearby or damage ecosystems. The costs of healthcare and environmental damage are borne by individuals and society, even though they are not involved in the production process. Social benefit= private benefit + external benefit Public goods: Non-excludability: Benefits derived from pure public good cannot be confined solely to those who have paid for it. Non-payers can enjoy the benefits of consumption at no financial cost to themselves- economists call this the “free rider” problem. Non-rival consumption: Each party's enjoyment of the good or service does not diminish others enjoyment- in other words the marginal cost of supplying public good to an extra person is zero. If a public good is supplied to one person, it is available to all. Private goods- Are rival and excludable, for example, a choclate bar can only be consumed by one consumer. Moreover, private property rights can be used to prevent others from consuming the good. Private Goods: Private goods are goods that are both rivalrous and excludable. Rivalrous: Consumption by one person reduces the amount available for others. For example, if you eat an apple, that apple is no longer available for someone else to eat. Excludable: It's possible to exclude people from using the good if they haven't paid for it. For example, if you buy a ticket to a movie, you can be excluded from watching the movie without a ticket. Examples of private goods include food, clothing, cars, and smartphones. Public Goods: Public goods are goods that are non-rivalrous and non-excludable. Non-rivalrous: Consumption by one person does not reduce the amount available for others. For example, if you enjoy the benefits of a streetlight, it doesn't diminish the light available for others. Non-excludable: It's difficult or impossible to exclude people from using the good, even if they haven't paid for it. For example, national defence protects everyone within a country's borders, regardless of whether they contribute to its funding. Examples of public goods include national defence, street lighting, public parks, and clean air. Quasi-public good, is a type of good that shares characteristics of both private and public goods. Quasi-public goods are excludable but not entirely rivalrous in consumption. This means that while access to the good can be restricted to those who pay for it, the consumption of the good by one individual does not significantly reduce its availability for others. Examples of quasi-public goods include highways, libraries, and cable television. The non-rival nature of consumption provides a strong case for the government rather to provide and pay for public goods. Examples of quasi-public goods: Many NHS hospitals and financed by a mix of state and private companies. Global public goods: Security from war The rule of law, property rights and contract enforcement Diseases Non use of nuclear weapons Public Goods and the Tragedy of the Commons- A term used in social science to describe a situation in a shared-resource system where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling that resource through their collective action. The tragedy of the commons is caused mainly by the lack of property rights meaning that the government/ community cannot protect the resource. Public goods recap: Non-rivalrous: Consumption by one person does not reduce the amount available for others. For example, if you enjoy the benefits of a streetlight, it doesn't diminish the light available for others. Non-excludable: It's difficult or impossible to exclude people from using the good, even if they haven't paid for it. For example, national defence protects everyone within a country's borders, regardless of whether they contribute to its funding. Examples of public goods include national defence, street lighting, public parks, and clean air. Non-rejectable: The collective supply of a public good for all means that it cannot be rejected by people, a good example is a nuclear defence system or flood defence projects. The reason on why services such as lighting and national defence need to be provided by the government is because people will not pay for these services. This is because they are non-rivalrous which means one Problems with Environmental Taxes: Assigning the right level of taxation: There are problems in setting the right tax so that the private cost will equal the social cost. Consumer welfare effects: Producers may pass on a tax to the consumer if the demand for good is inelastic. Effectiveness of a tax and unintended consequences: Effect of tax depend on the elasticity of demand Problems in setting the tax rate at the right level to archive aims. How much tax revenue is raised: Does an indirect tax generate substantial tax revenue. How is tax revenue used Consequences for equity: Who are the main winners and losers Dose a tax have a regressive impact on lower incomes Subsidies effective meeting their aims: Will they achieve desired stimulus Is subsidy sufficient Will subsidy affect productivity: Subsides for investment and research can bring positive spillover. Firms may be depended on state aid. Maximum price- This is a legally imposed maximum price (or price ceiling) in a market that suppliers cannot exceed. A maximum price is introduced to prevent prices rising above a certain level. March: A maximum price crates a shortage of Q1 to Q2 in the market meaning many consumers will not be able to access housing or food despite the lower prices as existing suppliers have now left the market or are simply not willing to supply at such a low price. Minimum prices: Some goods, such as cigarettes and alcohol have significant negative externalities. Arguments for a minimum price: Reduces negative externalities from heavy alcohol consumption Pubs may benefit from higher minimum prices in supermarkets Arguments against a minimum price: Minimum price is a tax on responsible drinkers. Regulation: Regulating negative externalities- Can be more effective is demand is unresponsive to price changes- Regulations can be gradually toughened each year (this will help stimulate capital investment) Disadvantage of regulation- High costs of enforcement- Regulation can lead to unwelcome unintended consequences. Trade Pollution Permits: Externalities caused by pollution can be reduced using trade pollution permits. (Firms are legally allowed to pollute but governments put a cap on how much they can pollute) Definition: Trade pollution permits is a system where companies can buy and sell permits that allow them to emit a certain amount of pollution, within an overall limit set by the government. Example: Imagine there are three factories in a city, each allowed to emit 100 units of pollution. The government sets a total cap of 300 units. Factory A finds a way to reduce its emissions and only needs 80 units, so it has 20 extra units. Factory B needs more permits because it's difficult for them to reduce pollution, so they buy 20 units from Factory A. Factory C, on the other hand, has outdated equipment and needs 120 units to operate, so it buys 20 units from Factory A and 20 units from Factory B. In this way, the total pollution stays within the limit, but each factory has flexibility in how they manage their emissions. Evaluation: Is it cost-effective? Compare the cost of reducing pollution through trading permits to other methods. Check if it encourages industries to find cheaper ways to reduce pollution. Is it fair for everyone? Make sure the costs and benefits are distributed fairly among different groups. Check if vulnerable communities are protected and decision-making is transparent. Effective enforcement may not be possible. Pollution is an international market failure that requires an international solution. State provision of Public Goods: Information failure: Information failure occurs because one party to a transaction does not have the information that is available to make a decision. Policies for addressing information failures Compulsory labelling on products (cigarettes). Improved nutritional information on food and drinks. Dangers of gambling addiction. Pollution permit Legally go to school until 16 Anti-competitive practices are illegal, such as collusion. (price fixing) Public choice theory Rent seeking What is meant by Government Failure: Government failure occurs when an intervention leads to a deeper market failure or even worse a new failure may arise Government failure can happen if a policy decision fails to create enough of an incentive to change people's actual behaviour. Examples of causes of government failure: Political self-interest (public choice theory) Regulatory capture Information gaps High enforcement/ compliance costs Policy myopia (short term) Damaging effects of red tape (excessive regulation)- inc barriers to market entry The law of Unintended Consequences: Examples: Bank bail outs- raises the problem of moral hazards (banks take excessive risk (2008 QE) Windfall Tax on North Sea oil and gas led to huge fall in investment and exploration- casing UK imports to rise.

Module 1: General Economic Principles Economics Social Science Optimal efficient location and distribution of scarce resources to satisfy unlimited human wants and needs Economic Principles People Face Trade-offs The cost of something is what you give up to get it Rational People think at the margin People respond to incentives Trade ccan make everyone better off Markets are usually a good way to optimize economic activity Governments can sometimes improve market outcomes A country’s standard of living depends on its ability to produce goods and services Prices rise when the government prints too much money Society faces a short-run trade-off between inflation and unemployment Key Terms Scarcity: Shortage Tradee-offs: A balance between two best incompatible features Opportunity cost: Potential benefits one misses out when choosing an alternative Branches of economics: Macroeconomics: Economy as a whole Microeconomics: Study of individual, household, and firm’s behavior in decision making Economics as Policy Adviser Scientific Method Roles of Assumptions Economic Models Economics as Scientist Postive vs Normative Analysis Economic Policy is a Messy Affair Why Economists disagree Difference in Scientific Judgements Difference in Values Perception vs. Reality Consumption Function Income increases, consumption also increases Consumption does not reach 0 Illustrates the positive relationship between income and consumption Even if there is no income, there will always be a consumption Economic Equations QD= 10-P QS= -5+2P Four Fundamental Economic Questions What to produce How much to produce How to produce For whom to produce?

Economics: Study of Scarce Resources - flashcards

(Draft) Chapter 13 - Investment

(Draft) Chapter 10 - Productivity and Pay

Chapter 5 - The Rise and Fall of Business