question
Productivity
answer
Efficient use of factors of production due to limited supply
question
Standard of living
answer
Quality of life based on the possession of necessities and luxuries that make life easier
question
Specialization of labor
answer
Method of increasing productivity in which workers become experts in one field to maximize productivity
question
Division of labor
answer
Labor is allowed to focus on one set of duties
question
Human capital
answer
The total of skills, abilities, health, and motivation of people
question
Economic growth
answer
Ability of economy to increase its total real output or GDP
question
Marginal benefit = marginal cost
answer
Rational decision making rule
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Utility
answer
Satisfaction
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Traditional economy
answer
Economic questions answered based on historical precedent or custom
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Economic questions
answer
What goods and services will be produced? How will goods and services be produced? Who will consume the goods and services?
question
Command economy
answer
Central authority answers economic questions
question
Market economy
answer
Economic questions answered by changes in price that occur as individual buyers and sellers interact in the market
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Economic freedom
answer
The right to choose occupation, employer, and money usage
question
Economic security
answer
Protection from layoffs due to illness and such
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Economic equity
answer
"Fairness" or morality of an economic policy
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Sole proprietorship
answer
Business ownership by one person
question
Partnerships
answer
Business ownership by two or more people
question
Corporation
answer
Business ownership set up by state law
question
Geographical monopoly
answer
Firm with no competitors in geographical region
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Technical monopoly
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A firm with no competitors due to the discovery of a new manufacturing technique or invention
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Government monopoly
answer
Business owned and operated by government
question
Roles of government in market economy
answer
Provide public goods and services, redistribute income, protect property rights and resolve market failures
question
Public good
answer
Good that government provides
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Stagflation
answer
Left shift in aggregate supply leading to increase in price level and decrease in real GDP
question
Balance of trade
answer
Difference between amount imported and exported for GDP activities
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Progressive tax
answer
Tax that increases with income
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Regressive tax
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Tax that decreases with amount purchased (sales tax)
question
Proportional tax
answer
Flat rate tax
question
Mutual fund
answer
Collection of various investments
question
Finance company
answer
Company that grants high-interest loans which are deducted from borrowers next paycheck
question
Credit union
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Offers same services as bank but is controlled by members rather than owners
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Savings and loan organization
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Organization that specifically focuses on savings and mortgage loans and prevents money from being readily available
question
Quota
answer
Limit on amount of good imported
question
Standards
answer
Ensure quality of imports
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Subsidy
answer
Payments to supplier used as incentive to produce more
question
Structural
answer
Type of unemployment where company cannot find qualified workers for a position
question
Frictional
answer
Type of unemployment where workers are released based upon disagreements
question
Cyclical
answer
Unemployment due to contracting economy
question
Net exports
answer
Exports minus imports
question
Consumer price index
answer
...
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