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ECON FINAL 2016
Mr. Stickler's Liberty Christian ECON Final Flashcards 2016
| Question | Answer |
|---|---|
| What is a "chamber of commerce"? | This is an organization that promotes the welfare of its member businesses. They sponsor activities ranging from educational programs to lobbying for favorable business legislation. (Pg. 81) |
| What are "labor unions"? | These are organizations that workers form to protect and represent its member's interests in various employment matters (such as pay and benefits). (Pg. 81) |
| What does the "Paradox of Value" state? | This asks the question "Why do diamonds, which are wants, cost so much more than water, which is a need?" (Pg. 14) |
| What is the "solution" to the "Paradox of Value"? | The solution to this is that something must be scarce and have utility (or "purpose") in order for it to have value. (Pg. 14) |
| What is the Fundamental Economic Question? | How to satisfy people's seemingly unlimited and competing wants through the careful use of relatively scarce resources. (Pg. 6) |
| What are the four (4) Factors of Production? | 1. Land; 2. Capital; 3. Labor; 4. Entrepreneurs. (Pgs. 8 - 9) |
| What does the Production Possibilities Curve itself tell us? | The different combinations of two (2) goods that can be produced, given efficient use of all Factors of Production. (Pg. 21 + Class Notes.) |
| List one (1) characteristic of a Traditional Economy. | The decision about how to use resources is based on habit or custom. (Pg. 34) |
| What is one (1) disadvantage of Traditional Economies? | New ideas are discouraged (i.e. there is very little innovation). (Pg. 35) |
| List one (1) characteristic of a Mixed Economy. | 1.) government & tradition answer some of the questions of WHAT, HOW, and FOR WHOM. (Pgs. 39 & 40) |
| List one (1) example of how goals can be resolved using trade - offs in the U.S. economy. | A company eliminates some positions & lets the employees go. They divide those job responsibilities among the remaining employees. In this case, they sacrificed full employment for economic efficiency. (Pg. 46) |
| What is a “corporation”? | A “corporation” is a form of business organization recognized by law as a separate legal entity with all the rights of an individual. |
| What is a "conglomerate"? | A “conglomerate” is a firm that has at least four businesses, each making unrelated products and more responsible for a majority of its sales. |
| What are "labor unions"? | These are organizations that workers form to protect and represent its member's interests in various employment matters (such as pay and benefits). (Pg. 81) |
| What is “collective bargaining”? | This term refers to times when unions participate in negotiations with management over pay, working hours, benefits, health care coverage, etc. (Pg. 80) |
| List one (1) advantage of a Mixed Economy. | The economy provides assistance for some people who might otherwise be left out. (Pg. 40) |
| What is the Law of Supply? | This law states that suppliers will normally offer more products or services for sale at high prices & less at lower prices. (Pg. 117) |
| List the six (6) things that can cause a change in market supply curves. | 1.) Cost of Resources, 2.) Productivity, 3.) Technology, 4.) Taxes & Subsidies, 5.) Expectations, 6.) Government Regulations. (Pgs. 120 - 123) |
| What is the difference between Total Cost and Marginal Cost? | Total Cost is "the sum of the fixed and variable costs" while the Marginal Cost is "the extra cost incurred when producing one more unit of output." (Pg. 134) |
| What does the term Marginal Analysis mean/ refer to? | This term refers to "a type of decision making that compares the extra benefits of an action to the extra costs of taking the action". (Pg. 137) |
| What is the difference between Total Product and Marginal Product? | Total Product is the "total output produced by a firm" while Marginal Product is "the extra output or change in total product caused by adding one (1) more unit of variable input". (Pg. 129) |
| What is one (1) thing that can cause the elasticity of a producer's supply to be elastic? | One (1) thing that can cause this is if the firm can adjust to new prices quickly. (Pg. 125) |
| What is one (1) thing that can cause the elasticity of a producer's supply to be inelastic? | One (1) thing that can cause this is if the nature of production is such that adjustments take longer. (Pg. 125) |
| What does the Law of Demand state? | This states that the quantity demanded is inversely related with its price. In other words, when price goes up, quantity demanded goes down (& vice versa). (Pg. 93) |
| What does the term "elasticity" mean/ refer to? | This term refers to "a general measure of responsiveness . . . it tells us how a dependent variable, such as quantity demanded, responds to a change in the independent variable, such as price." (Pg. 103) |
| When we compute the elasticity of demand, what are we trying to find out? | When we compute this, we are trying to find out whether price changes will effect the quantity of products that consumers will demand. |
| What was the Conservation Reserve Program of 1985? | This program paid farmers NOT to farm. The purpose was to reduce the supply of agricultural products. available in the market in hopes of controlling prices so they wouldn't plummet, causing farmers to go bankrupt. (Pg. 160) |
| What are three (3) problems with rationing? | 1. Nearly everyone feels his or her share is too small; 2. Administrative costs of rationing are very high; 3. Rationing often has a negative impact on incentive to produce goods. (Pgs. 145 - 146) |
| What does the term "Laissez-faire" mean/ refer to? | This term refers to the philosophy that the government should not interfere with business activity. (Pg. 169) |
| What is a "certificate of deposit"? | This is a document showing that an investor has made an interest - bearing loan to a bank. (Pg. 290) |
| What are the three (3) parts of the "financial system"? | 1.) The funds that a saver transfers to a borrower; 2.) Financial assets that certify conditions of a loan; 3.) The surplus of funds and financial assets together. (Pg. 290) |
| What is a "pension fund"? | This is a fund set up to collect income and disburse payments to those persons eligible for retirement, old-age, or disability benefits. (Pg. 292) |
| What are "mutual funds"? | These are ". . . investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.” (Notes) |
| What is the difference between a "bull" and a "bear market"? | A "bull market" is also known as a "strong" market because prices have been increasing for several months or years in a row; a "bear market" is a "mean" market in which prices have fallen sharply for several months or years. (Pg. 310) |
| What does the term "globalization" mean/ refer to? | This term relates to the movement toward a more integrated and interdependent world economy. (Pg. 500) |
| What does the term "multinational" mean/ refer to? | This refers to companies that produce and sell without regard to national boundaries. (EX: Ford Motor Company). (Pg. 502) |
| What does the term "comparative advantage" mean/ refer to? | This term means "the ability to do something at a relatively lower opportunity cost than someone else". (Pg. 504) |
| What was the General Agreement on Tariffs and Trade (GATT)? | This was an international agreement signed in 1947 between 23 countries to extend tariff (i.e. tax) concessions and do away with import quotas. (Pg. 504) |
| What is the purpose of the International Monetary Fund? | This group provides advice and financial assistance to nations so that their currencies can compete in open markets. This helps countries who would otherwise be unable to engage in international trade to get involved in this. (Pg. 504) |
| What was Thomas Malthus' view on population? | He believed that a population would grow faster than its ability to feed itself. |
| What did Thomas Malthus say would "eventually happen" where population growth is concerned? | He stated that "the masses of the world would be reduced to a condition of 'subsistence' - the state in which a population produces only enough to support itself"." (Pg. 510) |
| What are 3 things you can do to protect yourself against online theft? | 1.) Install a firewall on your laptop or desktop; 2.) Don't open suspicious E-mails or give personal information to anyone who contacts you; 3.) Check your balance often to see if thieves are taking money from your account. (Pg. R3) |
| Why is it important to obtain renter's insurance on any apartment that you rent - including apartments you live in while in college? | Landlords are not liable for personal property losses that occur for any reason. Renter's insurance will protect you against these losses in cases of fire or other natural disaster. |
| According to your textbook, how long will it take you to pay off a credit card debt of $1,000 if you just pay the 2% minimum payment? | It will take about 22 years to pay off this debt. (Pg. R11.) |
| Which kinds of credit cards are the "best" to have if you feel that you "must" have a credit card? | It is best to have a credit card with a low daily interest rate and offers the best rewards (i.e. points). Store credit cards (ex: Target) have the highest daily interest rate and should be avoided. |
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