Scarcity & Choices
The fundamental problem of economics, occurring because resources are limited.
What is scarcity?
This law states that as the price of a good increases, the quantity demanded decreases.
What is the law of demand?
A market structure where a single seller dominates the entire industry.
What is a monopoly?
The total dollar value of all final goods and services produced within a country's borders in a year.
What is GDP?
A tax on imported goods.
What is a tariff?
The most desirable alternative when making a choice.
What is opportunity cost?
This is the point where the supply and demand curve intersect.
What is the equilibrium?
A business owned and managed by a single individual.
What is a sole proprietorship?
A general increase in prices and a fall in the purchasing value of money.
What is inflation?
When a country can produce a good at a lower opportunity cost than another country.
What is comparative advantage?
The four factors of production required for the creation all goods and services.
What is land, labour, capital and entrepreneurship?
The economic state when the quantity supplied exceeds the quantity demanded.
What is a surplus?
A market dominated by a few large, powerful firms, such as the cell phone provider industry.
What is an oligopoly?
The percentage of the labor force that is jobless and actively looking for work.
What is unemployment rate?
A limit on the amount of a specific good that can be imported.
What is a quota?
A graph that shows the maximum possible production output of an economy, given two goods.
What is a production possibilities curve?
A legal maximum that can be charged for a good, like rent control.
What is a price ceiling?
This type of business organization is a legal entity owned by individual stockholders.
What is a corporation?
The sequence of expansion and contraction in economic activity over time.
What is the business cycle?
A tax where the percentage of income paid in taxes increases as income increases.
What is a progressive tax?
The extra cost or benefit of producing or consuming one more unit.
What is marginal analysis?
A measure of how much consumers react to a change in price.
What is elasticity?
A formal agreement among firms in an oligopoly to set prices or production levels, which is illegal in the U.S.
The central bank of the United States, responsible for managing monetary policy.
What is the federal reserve?
This occurs when a country's value of imports exceeds the value of its exports.
What is a trade deficit?