Economics Vocabulary for Economics Principles in Action by Arthur O'Sullivan
Terms : Hide Images
| 603847482 | Factors of Production | Land (natural resources used to to make goods/services), Labor ( the effort that people devote to a task for wich they are paid), and Capital (anyhuman made resource that is used to create other goods and services) | |
| 603847483 | Physical Capital | all-human made goods that are used to produce other goods and services; tools and buildings. | |
| 603847484 | Human Capital | the skills and knowledgs gained by a worker through education and experience | |
| 603847485 | Production Possibilities curve | A graph that shows alternative ways to use an economy's resources. | |
| 603847486 | Underutilization | using fewer resources than an economy is capable of using; point under production possibilities curve | |
| 603847487 | Production Possibilities frontier | The line on a production possibilities graph that shows the maximum possible output; connects the dots. | |
| 603847488 | Traditional Economy | economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services. | |
| 603847489 | Centrally Planned Economy/ Command Economy | ecomonic system in which the government makes all decisions on the production and consumption of goods. | |
| 603847490 | Market Economy | economic system in which decisions on production and consumption of good and services are based on voluntary exchange in markets. | |
| 603847491 | Mixed Economy | market-based economy system with limited government involvement. | |
| 603847492 | Sacrcity | limited quantities of resources to meet unlimeted wants | |
| 603847493 | Shortage | a situation in which a good or service is unavailable | |
| 603847494 | Effciency | using resources in such a way as to maximize the production of goods and services; point on the production possibilities curve | |
| 603847495 | Trade-off | an alternative that we sacrifice when we make a decision | |
| 603847496 | Guns or Butter | a phrase that refers to the trade-offs that nations make when choosing whether to produce more or less military or consumer goods | |
| 603847497 | Thinking at the Margin | deciding wheter to do or use ane additional unit of some resource. | |
| 603847498 | Key Economic Question | 1. What goods and services will be produced? 2. How should these goods and services be produced? 3. Who consumes these goods and services? | |
| 603847499 | Laissez Faire | doctrine that states that government genenerally should not intervine in the marketplace | |
| 603847500 | Demand | the desire to own something and the ability to pay for it | |
| 603847501 | Law of Demand | consumers buy more of a good when its price decreases and less when its price increases | |
| 603847502 | Demand Schedule | a table that lists the quantity of a good a person will buy at each differnt price | |
| 603847503 | Market Demand Schedule | a table that lists the quantity of a good all consumers in a market will buy at each different price | |
| 603847504 | Demand curve | a graph of a demand schedule, graph of the relationship between price and quantity demanded; decreases from left to right | |
| 603847505 | Change in Quantity Demanded | A cahnge along the demand curve | |
| 603847506 | Change in demand | Causes the curve to shift right when demand increses and left when demand decreases. | |
| 603847507 | What causes a shisft in the demand curve? | *income: if people have more money they shift the curve to the right (less money= left) *consumer expectations: if people expect the price to fall then they will buy more and shift the curve right *population: more people means higher deamnd for goods, shifts the curve right. *consumer tastes and advertising: If something is really popular it causes greater deamand, shifts curve right. | |
| 603847508 | Elastic Demand | demand in which changes in price have large effects on the amount demanded (greater than 1); ex. limonade | |
| 603847509 | Inelastic Demand | A situation in which an increase or a decrease in price will not significantly affect demand for the product (less than 1); ex. milk | |
| 603847510 | Supply | the amount of goods available | |
| 603847511 | Quantity Supplied | the amount a supplier is willing and able to supply at a certain price | |
| 603847512 | Law of Supply | Tendency of suppliers to offer more of a good at a higher price | |
| 603847513 | Supply Schedule | a chart that lists how much of a good a supplier will offer at different prices | |
| 603847514 | Market Supply Schedule | a chart that lists how much of a good all suppliers will offer at different prices | |
| 603847515 | Supply Curve | a graph of the quantity supplied of a good at different prices; increases from left to right | |
| 603847516 | Market Supply Curve | a graph of the quantity supplied of a good by all suppliers at different prices | |
| 603847517 | Inelastic Supply | exists when a change in a good's price has little impact on the quantity supplied | |
| 603847518 | Elastic Supply | When a small change in price causes a major change in the quantity supplied | |
| 603847519 | Shifts in Supply curve | Increase in supply shifts the curve to right and decrease in supply shift the curve to the left | |
| 603847520 | Equilibrium/Market Price | the point at which the graphs of quantity demanded and quantity supplied touch. | |
| 603847521 | Disequilibrium | describes any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market | |
| 603847522 | Excess Demand | when quantity demanded is more than quantity supplied; below the equilibrium point | |
| 603847523 | Excess Supply | when quantity supplied is more than quantity demanded; above equilibrium point | |
| 603847524 | Price Floor | a minimum price for a good or service | |
| 603847525 | Price Ceiling | a maximum price that can be legally charged for a good or service | |
| 603847526 | Perfect Competition | a market structure in which a large number of firms all produce the same product; no barriers of entry, no control over prices | |
| 603847527 | Natural Monopoly | a market that runs most efficiently when one large firm supplies all of the output; Complete control of prices, can't enter to compete (ex. water) | |
| 603847528 | Government Monopoly | a monopoly created by the government | |
| 603847529 | Oligopoly | a market structure in which a few large firms dominate a market; a variety of goods that are all similar, high barrier of entry and some control of prices | |
| 603847530 | Monopolistic Competition | a market structure in which many companies sell products that are similar but not identical; same good but they are all different in size, color, brand; low barrier of entry anf little control over price. (Ex. jeans) | |
| 603847531 | Price war | a series of competitive price cuts that lowers the market price below the cost of production. | |
| 603847532 | Deregulation | the removal of some government controls over a market | |
| 603847533 | Regulation | government intervention in a market that affects the production of a good | |
| 603847534 | Sole Prprietorship | businesses owned and operated by one individual; the most common form of busness in the U.S. | |
| 603847535 | General Partnership | partnership in which partners share equally in both responsibility and liability | |
| 603847536 | Limited Partnership | form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business | |
| 603847537 | Corporation | a business owned by stockholders who share in its profits but are not personally responsible for its debts | |
| 603847538 | Franchises | a semi-independent business that pays fess to a parent company in return for the exclusive right to sell a certain product or service in a given area | |
| 603847539 | labor force | All nonmilitary people who are employed or unemployed | |
| 603847540 | Laws Agains descrimination | laws that prevent companies form paying low wages to some employees based on factors like race, sex, color, religion, or nationality. | |
| 603847541 | Collective Bargaining | Negotiations between representatives of labor unions and management to determine pay and acceptable working conditions. | |
| 603847542 | Mediation | a settlement technique in which a neutral mediator meets with each side to try to find a solution that both sides will accept | |
| 603847543 | arbitration | a settlement technique in which a third party reviews the case and imposes a decision that is lejally binding for both sides | |
| 603847544 | Commodity money | objects that have value in themselves and that are also used as money; ex. cattle,salt | |
| 603847545 | Representative Money | objects that have value because the holder can exchange them for something else of value | |
| 603847546 | Fiat Money | money that has value because the government has ordered that it is an acceptable means to pay debts | |
| 603847547 | Money Supply | All the money available in the US economy | |
| 603847548 | Liquidity | the ability to be used as, or directly converted to, cash | |
| 603847549 | Saving/Checking Accounts | useful for people who need to make frequent, withdrawls usually pays fixed intrest | |
| 603847550 | Money market Accounts | allow you to save and to write limited checks, intrest rates not fixed | |
| 603847551 | Certificates of Deposit (CD's) | offer garanteed rate of intrest over a certain period of time, and can't be removed during that period of time. | |
| 603847552 | Financial Asset | claims on the property and the income of the borrower | |
| 603847553 | Mutual Fund | fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets | |
| 603847554 | Rule of 72 | This rule says to divide number 72 by the intrests rate of the investment to determine the amout of yoear it takes to double your investement | |
| 603847555 | Savings Bond | low-denomination bond issued by the United States government | |
| 603847556 | Municipal Bond | a bond issued by a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks and schools | |
| 603847557 | Corporate bond | A bond that a corporation issues to raise money to expand its business | |
| 603847558 | Bull Market | a steady rise in the stock market over a period of time | |
| 603847559 | Bear Market | A steady drop in the stock market over a period of time | |
| 603847560 | Circuit Breaker | Shows down teh stock market when the stocks begin to fall to prevent a panic. | |
| 603847561 | Speculation | The risk of making high-risk investments with barrowed money in hopes of getting a big return | |
| 603847562 | Gross Domestic Product | the dollar amount of all final goods and services produced within a country's borders in a year. | |
| 603847563 | Intermediate Goods | goods used in the production of final goods | |
| 603847564 | Nominal GDP | GDP measured in the current prices | |
| 603847565 | Real GDP | GDP expressed in constant, or unchanging, prices; adjusted for inflation | |
| 603847566 | Gross National Product (GNP) | Annual income earned by US-owned firms and US citizens | |
| 603847567 | Depreciation | the loss of the value of capital equipment that results from normal wear and tear | |
| 603847568 | Recession | prolonged economic contaction | |
| 603847569 | Depression | a recession that is especially long and severe | |
| 603847570 | Capital Deepening | process of increasing the amount of capital per worker | |
| 603847571 | Frictional Unemployment | unemployment that occurs when people take time to find a job; personal choice | |
| 603847572 | Seasonal Unemployment | unemployment that occurs as a result of harvest schedules or vacations, or when industries slow or shut down for a season | |
| 603847573 | Cyclical Unemployment | unemployment that rises during economic downturns and falls when the economy improves | |
| 603847574 | Structural Unemployment | unemployment that occurs when workers' skills do not match the jobs that are available | |
| 603847575 | Consumer Price Index (CPI) | a price index determined by measuring the price of a standard group of goods meant to represent the "market basket" of a typical urban consumer to determine change in prices | |
| 603847576 | Quantity Theory | theory that too much money in the economy causes inflation | |
| 603847577 | Demand-Pull Theory | theory that inflation occurs when demand for goods and services exceeds existing supplies | |
| 603847578 | Cost-Push Theory | theory that inflation occurs when producers raise prices in order to meet increased costs | |
| 603847579 | Wage-Price Spiral | the process by which rising wages cause higher prices, and higher prices cause higher wages | |
| 603847580 | Lorenz Curve | the curve that illustrates income distribution | |
| 603847581 | Proportional Tax | A tax in which the average tax rate is the same at all income levels. | |
| 603847582 | Progressive Tax | a tax for which the percentage of income paid in taxes increases as income increases; income tax | |
| 603847583 | Regressive Tax | a tax for which the percentage of income paid in taxes decreases as income increases; sales tax |
