Upgrade to remove ads
Economics Study chapters 1 - 7
Terms in this set (51)
limited quantities of resources to meet unlimited wants
Factors of Production
the use of land, labor, and capital; the three groups of resources that are used to make all goods and services
an alternative that we sacrifice when we choose one course of action over another.
Guns or Butter
a phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods.
The most desirable alternative given up as a result of a decision.
Thinking at the Margin
deciding to use one additional unit or some resource.
using resources in such a way as to maximize the production of goods and services
using fewer resources than an economy is capable of using
the method used by a society to produce and distribute goods and services
three basic economic questions
What goods and services should be produced. How should these goods and services be produced. Who consumes these goods and services?
relies on habits, rituals or customs to decide questions of production and consumption of goods and services.
centrally planned system
the government makes all the decisions on the production and consumption of goods and services
individuals own the factor of production and decide how the basic economic questions are answered based on trade or exchange
market-based economic system with limited government intervention
term used to describe the self-regulating nature of the marketplace
How is future price is regulated to current demand
If the price is expected to drop current demand will fall; if the price is expected to rise current demand will rise
law of demand
consumers buy more of a good when its price decreases and less when its price increases
what does a change in the price of a product affect?
a graphic representation of a demand schedule
shifts in the demand curve
a shift to the right indicates an increase in demand; a shift to the left indicated a decrease in demand.
five non-price factors that cause demand to change
(T.I.M.E.R) T = chance in consumes Taste; trends and advertisement play a big role in this. I = change in consumer Income. M = change in Market size; population. E = change in consumer Expectation; when a price is expected to rise or drop in the future. R = change in price of a Regulated good.
law of supply
tendency of suppliers to offer more of a good at a higher price
the amount a supplier is willing and able to supply at a certain price; only a change in the price of a product itself will affect this.
How change in price affects the supply curve
changes in the price of the product itself will only cause movement along the existing indicating a change in quantities supplied
a graph of the quantity supplied on the x axis and prices on the y axis indicating goods supplied at what price.
seven non factors that cause supply curve to change
Government regulation, the price of inputs affecting the cost of a production, technology, the number of suppliers, future expectations of a price, government subsidy, effects of taxes
a cost that does not change, no matter how much a good is produced; ex. rent, machinery parts, property taxes, workers on salary
a cost that rises or falls depending on how much is produced; ex. cost of labor, electricity and heating bills
a government payment that supports a business or market
prices lead to an efficient allocation of resources
the point at which quantity demand and quantity supplied are equal
a maximum price that can be legally charged for a good or service; are place on essential goods such as rent
a minimum price an employer can pay a worker for an hour of labor; first set in 1938 for $0.25 an hour
a situation in which quantity supplied is greater than quantity demanded
a situation in which quantity demanded is greater than quantity supplied
the financial and opportunity cost consumers pay when searching for a good or service; ex. missing work to find an apartment, driving to different stores to find a product
a system of allocating scarce goods and services using some tool other than money
three market problems
imperfect competition, spillover costs, imperfect information
a market structure in which a large number of firms all produce the same market
barriers to entry
factors that make it difficult for new firms to enter a market
a market dominated by a single seller
economies of scale
factors that cause a producer's average total cost per unit to fall as output rises
a market that runs most efficiently when one large firm provides all the output
patent, franchise, license
three types of government monopolies
a market structure in which many companies sell products that are similar but not identical; ex. pizza, jeans, ice cream, fast food
a way to attract customers through style, service, or location, but not a lower price
forms of nonprice competition
physical characteristics, location, service level, advertising, image or status
a market structure in which a few large firms dominate a market
a formal organization of producers that agree to coordinate price and production
laws that encourage competition in the market place; you cant for a trust with other businesses
the removal or some government control over a market
THIS SET IS OFTEN IN FOLDERS WITH...
Economics Today: The Micro View
Micro chap 13 monopolies
YOU MIGHT ALSO LIKE...
Economics: Chapters 1-2, 4-5
Fundamentals of Economics
Economics, Final Study Guide
COMBO STUDY SET: Intro to Econ terms AND…
OTHER SETS BY THIS CREATOR
Into computers and apps module 1
College algebra chapters 1-3
OTHER QUIZLET SETS
Economics Mid Semester Exam Topics Covered
Midterm Review Civics and Economics
Economics Midterm 1