Economics Final flashcards
for my economics final
Terms
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- Absolute advantage
- no competition. example: Brazil has absolute advantage over Brazilian wood.
- institutions
- traditional set way to do something
- Republic
- Elected representatives vote on our laws (our system)
- Communism
- Government owns and controls everything (land, pricing, salaries, etc)
- Socialism
- economic system where government controls major economic industries
- Allocation
- choose, budgeting
- corporation
- limited liability. Nike taxed like a person, liability limited to nike buildings and nike stock.
- liquidity
- can get hands quickly on cash
- trust
- business form of concept of monopoly. illegal in 1896- trust act.
- FICA
- social security tax
- command economy
- person or group telling others what to do. supply and demand doesn't matter.
- Equilibrium price
- where supply and demand meet. determines price in free market economy.
- Comparative advantage
- choose one that they're better at. Example: costa rica picks which one they do better with- guns or butter. Choose butter because they're better at it and can make more money from it compared to guns.
- Wealth
- not just cash. includes knowledge, piece of mind, contentment, and enough money to live off of
- Mixed economy
- mixture of old style capitalism and government regulation
- technology
- application of industrial arts
- Products
- goods and services
- merger
- 2 companies merge into 1
- Sole proprietorship
- one person runs business. responsible for everything.
- Barter
- to trade. underground economy- untaxed
- proxy
- sign over votes to a group
- Buying on margin
- buying on borrowed money. Could buy on 10% margin (borrow 90%) in 1920's. Federal reserve regulates this.
- NYSE
- on wall street. Financial center of United states in New York
- Public good
- take away money for other people
- Social security
- put in in the 1930's. Take care of old people who got hurt in Great Depression.
- Open shop
- free to join or don't join union
- Inflation
- general increase in prices. value of money decreases. if wages go up, price goes up.
- SEC
- regulates NYSE. Polices to stop crooks in stock exchange.
- Union shop
- everybody's in the union once they get hired like it or not.
- preferred stock
- second ones who get money in bankruptcy.
- Capital goods
- machines, tools, factories
- Capitalism
- private ownership and free enterprise: creation of capital by business. Government doesn't stop the businesses.
- 4 Factors of Production
- Land (natural resources), labor, capital (building and machinery), and entrepreneurial skills
- stock market
- sells shares of ownership of company
- common stock
- normal stock voting. one per share. elect CEO nd board of directors
- Opportunity cost
- lose all alternatives to use resources because they're limited when you use your resources on something else.
- value
- scarcity-utility
- closed shop
- labor union does hiring. have to join and play dues before you get the job. illegal in a lot of places.
- partnership
- two or more who share responsibilities
- Near money
- stuff that you own but can't spend right now (not liquid). Example: trust fund
- law of diminishing returns
- there comes a point in which if you're putting more good into bad. DAVID RICARDO.
- Collective bargaining
- workers stack contracts and hire someone to go to boss and ask for raise.
- Scarcity
- The limited resources for production relative to the wants for goods and services
- Democracy
- system of govt. where the people vote on the laws
- Taft-hartley act
- government can step into any strike that is harming the nation. can delay strike for 3 months
- Specie
- valuable metals (gold, silver) that backs up money