Economics - Midterm

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  1. ´╗┐Market
    pg 4 – A way for buyers and sellers to voluntarily exchange goods and services for money.
  2. Globalization
    • pg 6 – The increasing exchange of goods,
    • services, ideas, and people among countries.
  3. Laissez-Fair
    pg 8 Let it take care of its self. (Would be animaginary economy with few or no government regulations or laws at all.)
  4. Deregulation
    pg 10 & 117 – The process of reducing government control over markets.
  5. Economics
    pg 10 – The study of how individuals,businesses, and governments make decisions and trade-offs in the face of scarce resources.
  6. Gross Domestic Product (GDP)
    • pg 11 & 137 – The dollar value of
    • the total output of he economy in a year. Which is the dollar value of the total output of a national
  7. Safety Net
    pg 12 – The Government programs which provide a measure of security for the poor, sick and vulnerable
  8. Market Price
    pg 21- The Typical price at which a good or service sells.
  9. Sales Price
    pg 22 – Intentionally set below the market price to stimulate purchases.
  10. Negotiated Prices
    pg 22 – Which are determined by individual buyer and seller on a case-by-case basis.
  11. Volume Discount
    pg 22 – A lower price for buying in bulk.
  12. Law of Demand
    pg 23 A lower price tends to increase the quantity demanded, all other things equal.
  13. Demand Schedule
    pg 23 – The link between a buyer’s quantity demanded and the price.
  14. Zero Price
    pg 24 – Occurs when an additional unit of a good or service is offered at no cost to buyers.
  15. Satiation
    pg 25 – The point at which the value of additional consumption of a food or service goes to zero.
  16. Opportunity Cost
    pg 25 – The value or benefit of the next-best alternative useof money or time. Not just the best option
  17. Quantity Supplied
    pg 27 – by a particular seller in the amount of goods and services that the seller is willing to provide at a given price.
  18. Supplied Schedule
    pg 27 – For a good or service reports the quantity supplied at different selling prices.
  19. Law of Supply
    pg 28 – A higher price tends to increase the quantity supplied, all other things equal.
  20. Excess Supply
    pg 38 – When quantity supplied exceeds quantity demanded at the current market price.
  21. Excess Demand
    pg 38 – When quantity demanded exceeds quantity supplied at the current market price.
  22. Market Equilibrium
    pg 39 – Where the quantity supplied and thequantity demanded are equal.
  23. Invisible Hand
    pg 38 – A term to describe a situation in whichindividual actions of buyers and sellers tend to result in a positive social outcome.
  24. Demand Shift
    pg 42 – A Change in the amount buyers want topurchase at a given price.
  25. Supply Shift
    pg 42 – A Change in the amount sellers supplyat a given price.
  26. Inelastic Supply
    pg 53 – A situation where the quantity supplied of a good does not change much even if the price elasticity of supplyis less than 1.
  27. Inelastic Demand
    pg 53 – A situation where the quantitydemanded does not change much even if the price changes significantly. More precisely, a situation where the priceelasticity of demand is less than 1. (examplegas – things we can’t change)
  28. Elastic Supply
    pg 53 – Implies that a small price change hasa big impact on quantity supplied. Intuitively, a situation in which a small change in price has a bigimpact on quantity supplied. Moreprecisely, a situation in which the price elasticity of supply is greater than 1.
  29. Elastic Demand
    pg 53 – Meansthat a small change in price has a big impact on quantity demanded. (exampleOrange Juice buy Apple Juice)
  30. Normal Good
    pg -52 – A good or service whose demand risesmore or less in step with income.
  31. Luxury Good
    pg 52 – A good or service whose demand risesvery sharply as income increases.
  32. Inferior Goods
    pg 53 – A good or service whose demand falls as income increases.
  33. Marginal Cost
    pg 73 – The added expenses of producing onemore unit of output.
  34. Fixed Costs (also know as long term costs)
    pg 74-75 –Fixed costs are difficult to change or costs can’t be changed for examplemortgage, rent etc.
  35. Variable Costs (also known as short term costs)
    pgs 77-78 – Coststhat managers can quickly raise or lower by decisions they make today.
  36. Profit Maximization
    pg 77 – The main objective of a businessin a market economy: finding a way to achieve the largest difference between revenueand costs. Business will increaseproduction as long as marginal revenue exceeds marginal cost.
  37. Perfect Competition
    pg 88 – A situation in which all buyersand sellers are price takers.
  38. Price Takers
    pg 88 – Both buyers and sellers who take the marketprice as given and make their buying and production decisions accordingly.
  39. Barrier and Entry
    pg 93 – Anything that makes it difficult fora new competitor to enter a market.
  40. The Shutdown Decision
    pg 95 – The decision of whether abusiness will keep operating.
  41. Oligopoly
    pg 98 – A market containing a small number ofsellers producing similar products.
  42. Monopoly
    pg 98 – A market in which there is only oneseller, and buyers have no good alternatives.
  43. Monopolistic Competition
    pg 98 – A situation where a market has manysellers with similar but not standardized products.
  44. Public Sector
    pg 112 – The portion of the economy thatincluded the federal, state, and local levels of government.
  45. Private Sector
    pg 112 – The economy outside of government,including privately owned business.
  46. Corruption
    pg 127 – Bribery or other illegal activitiesintended to influence government actions.
  47. Market Regulation
    pg 126 – The role of the government insetting the basic rules for market competition.
  48. Income Redistribution
    pg 128 – Shifting money from rich orpoor to close big income differences.
  49. Final Goods and Services
    pg 138 – The goods and services thatare bought by the ultimate users.
  50. Government Consumption
    pg 143 – Includes all the salaries paidto government workers, such as teachers, police, military personnel, USSenators, and the President.
  51. Government Investments
    pg 143 – On the other hand, reports allpurchases of long-lived assets such as tanks and planes, government buildings,and software.
  52. Export
    pg 145 – The goods and services produced in a countryand old outside that country.
  53. Import
    pg 145 – Goods and services that are producedoutside a county and consumed within that country.
  54. Nonmarket Economy
    pg 147 – The part of the economy where peopleperform productive work without getting paid. Includes stay in home moms and volunteering.
  55. Average Price Level
    pg 158 – A measure of how much it costs topurchase a market basket of goods and services.
  56. Market Basket
    pg 158 – The typical household pattern ofexpenditures on goods and services that is used to calculate the average pricelevel.
  57. Consumer Price Index (CPI)
    pg 158 – A measure that tracks the averageprice level, starting from a base year.
  58. Inflation Rate
    pg 160 – The annual percentage change in theaverage price level. / The annual percentage change in the average price level.
  59. Economic Growth
    pg 178 – When an economy’s production of goodsand services increases. / The increasein an economy’s production of goods and services. Usually measured by the growth in grossdomestic product adjusting inflation.
  60. Zero Sum Economy
    pg 180 – A situation where if we want toproduce more of something, we necessarily have to produce less of something else./ When the only way an economy can produce more of something is to produce lessof something else
  61. Productivity
    pg 189 – Economic output divided by the number ofworker hours.
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Economics - Midterm
Economics - Midterm Vocab Words
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