Econ 101
A severe worldwide economic downturn during the 1930s.
What is the Great Depression?
The measure of the monetary value of final goods and services—that is, those that are bought by the final user—produced in a country in a given period of time
What is the GDP or gross domestic product?
These are places (physical or virtual) where buyers and sellers interact to exchange goods and services
What are markets?
The overall rise in the prices of goods and services over time. It has significant effects on consumers, businesses, investors, and the overall economy.
What is inflation?
A concept that shows how inputs (like labor, capital, and materials) are used to produce output.
What is the production function?
Competitive markets benefit consumers by ensuring lower prices, innovation, and this.
What is product variety?
This market structure is characterized by a single seller with no direct competition.
What is a monopoly?
A document summarizing a person's skills, education, and work experience.
What is a resume?
A firm that can set prices due to a lack of competition has this economic advantage.
What is Market Power?
Created by Adam Smith, This is the guiding principle that underpins the US system of Economics.
What is Laissez Faire or the Invisible Hand
The section of economics that focuses on the behavior of individual economic agents, such as households, firms, and markets.
What is Microeconomics?
This measurement is used to compare the GDP of various sized countries.
What is the per capita GDP?
A situation where quantity supplied exceeds quantity demanded, leading to price decreases.
What is a surplus?
A measure that examines the weighted average of prices of a basket of goods and services that are of primary consumer needs
What is the CPI or consumer price index?
These are the four factors of production.
What are land, labor, capital, and entrepreneurship?
A firm maximizes profit when it produces at the output level where this equals marginal cost.
What is price (P)
A monopoly has this type of power, allowing it to set prices without competition.
What is market power?
A rise in the price of goods and services leads to an increase in this labor market factor.
What is labor demand?
This type of good is both non-excludable and non-rivalrous, meaning one person’s use does not prevent another from using it.
What is a public good?
This founding father advocated for a strong central bank to stabilize the U.S. economy
Who was Alexander Hamilton?
The three basic questions of economics
What to Produce, How to produce, and for whom to produce.
This sector is on average 2/3rds of the US GDP.
A situation where quantity demanded exceeds quantity supplied, leading to price increases.
What is a shortage?
A federal agency that helps control the US economy by using monetary policy to determine the size and rate of growth of the money supply.
What is the US Federal Reserve?
Costs that do not change regardless of the amount of output.
What is a fixed cost?
In a competitive market, the demand curve for an individual firm’s product is this shape.
What is perfectly elastic (horizontal)?
By restricting supply, a monopoly can keep these artificially high.
What are prices?
This term refers to the total hours workers are willing and able to work at different wage levels.
What is labor supply?
A factory that pollutes a river, negatively affecting nearby residents, is an example of this type of externality.
What are externalities?
This president opposed the Second Bank of the United States and his actions contributed to the Panic of 1837.
Who was Andrew Jackson?
The use of resources today to create future benefits, often in the form of capital.
What is investment?
This is the fastest growing sector of the US Economy.
What is the service sector?
A situation that occurs when the quantity supplied equals the quantity demanded at a particular price.
What is supply equilibrium?
This theory explores how consumers derive satisfaction from goods and services.
What is Utility Theory?
The economic law that states adding more of one input, while keeping others fixed, will eventually yield lower additional output.
What is the Law of Diminishing returns?
This type of market structure has many firms selling identical products, no barriers to entry, and firms are price takers.
What is perfect competition?
A monopoly might sell multiple products together to limit competition, a practice known as this.
What is bundling?
A large event where employers meet potential employees in one location.
What is a job fair?
Governments may impose these charges on polluting companies to reduce environmental harm.
What are emissions fees?
This law raised tariffs on imports in 1930, worsening the Great Depression by reducing global trade
What is the Smoot-Hawley Tariff?
Known as the "Father of Economics," he wrote The Wealth of Nations and introduced the idea of the "invisible hand."
Who was Adam Smith?
This sector of the US economy has gone from 37% to less than 2% of the US economy.
What is the farming industry?
The total quantity of a good that all producers are willing to sell at various prices.
What is the Market Supply?
This type of inflation occurs when an increase in the supply of money and credit stimulates the overall demand for goods and services to increase more rapidly than the economy’s production capacity.
What is the demand-pull effect?
These costs change based on the output.
What are variable costs?
A competitive firm determines its output level by producing until this cost equals price.
What is marginal cost (MC)?
This type of law is designed to prevent monopolies from abusing their power and harming consumers.
What are antitrust laws?
A form of price floor, this law sets the lowest legal hourly wage a worker can be paid.
What is the Federal Minimum Wage?
This government program all workers pay into and provides financial assistance to retirees and disabled individuals
What is social security?
This is one of the three main tools the Federal Reserve uses to control the money supply by buying or selling government securities.
What is Open Market Operations?
The branch of economics that deals with the broader economy, exploring national and global trends like inflation, unemployment, and economic growth.
What is Macroeconomics?
A type of company where pieces of the company, called stock, are sold and traded to whoever can and wants to buy them on the stock market.
The economic condition caused by decreased demand, lower production levels, falling prices, and increased unemployment.
What is a recession?
This type of inflation is caused by the increase in prices working through the production process inputs.
What is the cost-push effect?
The additional cost of producing one more unit.
What is the marginal cost?
A competitive firm determines its output level by producing until this cost equals price.
What is marginal cost (MC)?
Unlike monopolies, this type of market structure has many firms selling similar but slightly differentiated products.
What is monopolistic competition?
This occurs when the quantity of labor supplied equals the quantity of labor demanded.
What is labor market equilibrium?
This problem arises when people benefit from a public good without contributing to its cost.
What is the Free Rider Problem
Nicknamed the "Trust Buster," this president aggressively used antitrust laws to regulate monopolies.
Who was Teddy Roosevelt?
A policy of minimal government interference in economic affairs.
What is Laissez-Faire?
What are government regulations?
The type of global market where raw materials are bought and sold.
What is a commodity market?
Three government actions that can negatively affect consumer demand.
What are Tariffs, Government shutdowns, and government actions that cause sudden increases in unemployment?
Decisions businesses make to stay open where they continue producing if revenue covers variable costs.
What are short run production decisions
This type of firm must accept the market price because it sells a homogeneous product.
What is a price taker?
A monopoly maximizes profits by setting production where these two economic factors are equal.
What are marginal revenue and marginal cost?
The economic term for a situation where employees work part-time or below their skill level.
What is underemployment?
Governments can use these financial tools to either incentivize or discourage specific economic behaviors.
What are taxes and subsidies?
What is the Clean Air Act of 1970?
Undesirable events that happen when things go wrong due to business actions.
What is Market Failure?
The kind of business that is owned by only one person.
What is a single proprietorship?
A maximum price set by the owner of the market or government that must be used carefully because it can lead to shortages.
What is a price ceiling?
This type of inflation can occur across any sector. It happens when the expectation of inflation causes additional inflation.
What is built in inflation?
The extra output gained by adding one more unit of input.
What is marginal physical product or MPP
The government may regulate monopolies to prevent this negative market outcome, where firms restrict output to drive up prices.
What is price gouging or inefficiency?
High startup costs, patents, and government regulations are examples of these obstacles preventing new competitors.
What are barriers to entry?
When a worker's efficiency increases, it raises this measure, which affects labor demand.
What is Marginal Physical Product or MPP?
This 1890 law was designed to prevent monopolies and maintain fair competition.
What is the Sherman Anti-Trust act?
The abuses of workers during the Gilded Age led to the creation of this agency in 1913 to improve working conditions.
What is the Department of Labor?
Inefficiencies or unintended consequences caused by government policies.
What is Government Failure?
These economies have a lot of money sunk into factories, technology, and infrastructure. This allows a country to produce more with less effort and manpower
What is a captial intensive economy?
A minimum price set by the market or the government. They must be carefully used or they can lead to surpluses.
What is a price floor?
The kind of product where a price increase leads to a decrease in total revenue; price decrease leads to an increase in total revenue
What is Elastic Demand Products?
The decisions businesses make to expand when profits justify them.
What are Long-Run investment decisions?
If more firms enter a competitive market, what happens to price?
What is price decreases?
This industry is often considered a natural monopoly due to the high cost of infrastructure.
What are public utilities? (Also accept any specific public utility.)
This principle states that as more workers are hired, the additional output of each worker eventually declines.
What is the law of diminishing returns
This occurs when the free market fails to allocate resources efficiently, leading to overproduction or underproduction of goods and services.
What is market failure?
This founding father envisioned a nation of small, largely self sufficient, rural towns and few large cities.
Who was Thomas Jefferson?
A 1920's protectionist policy designed to shield American farmers and manufacturers from foreign competition by imposing high tariffs on imported goods.
What was the Smoot-Hawley Tariff Act?
These economies use less capital ($) machinery and technology and more manpower.
What is a labor intensive economy?
These are the six determinates of supply.
What is technology, factor costs, competition, taxes & subsidies, expectations, and number of sellers?
The kind of product where a price increase leads to an increase in total revenue; price decrease leads to a decrease in total revenue.
What is an inelastic demand product?
The formula to calculate this number is
Total Revenue - (Accounting Costs + Opportunity Costs)
What is economic profit?
A high startup cost, government regulations, and patents are all examples of this economic concept.
What are barriers to entry?
A monopoly might use lawsuits or excessive regulations to discourage new competitors.
What is legal harassment?
This concept explains the additional revenue a worker generates for a firm.
What is marginal revenue product (MRP)?
This economic system uses supply, demand, and price signals to allocate resources efficiently.
What is a market mechanism?
This government agency was born out of banking system abuses that led to the great recession of 2008.
What is the CFPB or consumer financial protection bureau?