Economics Stuff
Define Economics
Social Science that studies how people, both individually and in groups, decide to use scarce resources to satisfy their wants.
Define price floor
The minimum legal price a seller can charge for a good or service
Define Purchasing Power:
Amount of money people have to spend on goods/services
Define Progressive Tax.
Tax designed to take a larger percentage of income from the wealthy than the poor.
WHAT IS A MONOPOLY?
WHEN THERE IS ONE SINGLE SELLER IN MARKET WITH NO CLOSE SUBSTITUTE
Define Scarcity.
Not enough resources to satisfy wants.
Define price ceiling:
The maximum price a seller can legally charge for a good or service
Define Surplus:
When quantity supplied is greater than quantity demanded
Define Proportional Tax
A tax that takes the same percentage of income from the wealthy and poor.
What are the 3 main types of taxes?
Progressive, proportional (flat), regressive.
Name 4 of the 6 determinants (shifters) of demand.
Number of consumers, compliments, substitutes, change in income, tastes and preferences, expectations
What is the Law of Demand?
As the price gets higher, people want less of a particular product
List and define the 4 factors of production.
Land: Natural Resources (“Gifts of Nature”)
Labor: Effort people put in
Capital: Buildings, tools, machines people create + use to produce goods + services
Entrepreneurship: A person who puts money and ideas into starting a business
What is the Law of Supply?
As the price gets higher, suppliers are willing to supply more of a product.
DEFINE OPPORTUNITY COST
Opportunity cost is the value of the next-best alternative when a decision is made; it's what is given up .
Define Equilibrium Price.
What the price is at the moment in the marketplace.
Define GDP
Value of products & Services produced within the territorial boundary of a country.
Define Elasticity:
A measure of how quantity demanded responds to change in price
List and describe each type of economic system.
Traditional, Capitalist/Market, Mixed, Command
Define Inelasticity
When Supply/Demand are not very responsive to a change in price
DEFINE INFERIOR GOOD
a good whose demand drops when people's incomes rise. (or what people choose when incomes drop)
Define complementary good
he demand of one good is linked to the demand for another good (i.e. cereal and milk, peanut butter and jelly)
Four Types of Unemployment:
Seasonal, Structural, Cyclical, Frictional.
What is the Consumer Price Index (CPI)?
Measure that examines the average of prices of goods and services in a “basket”.
Name 4 of the 5 determinants (shifters) of supply
Number of sellers, government regulation, expectations of future profit, cost of inputs, technology