Economics Basics
The study of how people use limited resources to satisfy unlimited wants.
Economics.
What is a change in quantity demanded?
A movement along the demand curve.
The income you take home after taxes.
Net income.
What are the factors of production?
Land, labor, capital, and entrepreneurship.
A period of rising GDP and economic growth.
Expansion.
The next best alternative you give up when making a choice.
Opportunity cost.
A factor like consumer taste, income, or expectations can cause this.
A shift in demand.
A tax applied directly to income or property.
Direct tax
A business owned by one person.
A sole proprietorship?
Total value of all final goods and services produced in a country.
GDP
These three questions determine how every economic system allocates resources.
What will be produced? How will it be produced? For whom will it be produced?
The price at which quantity supplied equals quantity demanded.
The equilibrium price.
The type of interest rate that changes over time based on the market.
A market structure with only one seller.
A monopoly.
A tax on imported goods used to protect domestic industries.
A tariff.
The point at which an additional unit of a good gives less and less satisfaction.
Diminishing marginal utility.
A situation where supply increases while demand decreases will cause this in equilibrium price.
A decrease.
The strategy of spreading investments to reduce risk.
Diversification.
When marginal cost equals marginal revenue, this decision is reached.
the profit-maximizing output level.
Government use of spending and taxes to influence the economy.
Fiscal policy.
The difference between money and currency.
Money is anything accepted as payment; currency is the physical form of money.
The interaction of supply and demand determines this central concept in market economies.
Market price.
The formula that relates nominal interest rate, inflation, and real interest rate.
Nominal interest rate – inflation = real interest rate.
A side effect of economic activity that affects people not involved in the decision.
An externality.
The ability of a country to produce a good at a lower opportunity cost.
Comparative advantage.