Economics Vocabulary

Good

A tangible object that can be bought and used to meet the needs and wants of customers.

Scarcity

Our goods and services are limited due to this economic problem.

Physical capital

Man-made objects that are used to make other goods and services.

Renewable Resource

A resource that can be naturally replenished.

Salary

A fixed income paid on a monthly basis.

Trade-offs

An alternative that we sacrifice when we make a decision.

Opportunity Cost

The most desirable sacrifice when we make a decision.

Need

That which is necessary for survival.

Land

Natural resources used to make goods and services.

Productivity

The degree to which resources are being used efficiently.

Human Capital

Knowledge and skill gained on the job that is used to make goods and services.

Incentive

A reward that is offered to persuade people to take certain economic actions.

Consumer

A person who buys or uses goods and services.

Fixed cost

A cost that remains the same no matter how many goods are produced.

Wage

The payment for the service of one unit of labor.

Total Cost

Fixed costs plus variable costs.

Producer

A person who makes goods and services.

Marginal costs

The extra cost of producing one more unit of a good.

Variable costs

The expenses that change with the number of goods produced.

Greater

When using the cost benefit analysis, you want your benefits to be _____________ than your costs.

service

actions one person performs for another.

Innovation

improving a good or service.

capital goods

goods or raw materials used to make finished products

profit

the amount of money left over after all the costs of production have been paid

automation

machines control production

division of labor

the breaking down of a job into separate, smaller tasks, which are performed by different workers.

consumer goods

goods bought in the market and not used in the production of other goods.

specialization

takes place when people, businesses, regions, and even countries concentrate on goods and services that they can produce better than anyone else.

robotics

machines perform physical tasks

blue-collar worker

working class employee who performs manual or unskilled labor

assembly line

a manufacturing process in which interchangeable parts are added to a product to create an end product

market

place where the price of goods and services are determined as exchange takes place.

white-collar worker

perform tasks that require less physical labor/skilled workers

price ceiling

a maximum price for a good or service

disequilibrium

any price or quantity not at equilibrium

unskilled labor

requires no specialized skills, education, training

monopoly

a market dominated by a single seller

partnership

a business organization owned by two or more persons who agree on a specific division of responsibilities and profits

bull market

when the stock market steadily rises over a period of time

supply-side economics

a school of economics that believes that tax cuts can help an economy by raising supply

oligopoly

a market structure in which a few large firms dominate the market

shares

units in which ownership of a corporation are sold in

money

anything that serves as a medium of exchange, a unit of account, and a store of value.

fiscal policy

the use of government spending to influence the economy.

collective bargaining

the union and company representatives meet to negotiate a new labor contract

Sherman anti-trust

created in 1890 and banned monopolies and other business combinations that prevented competition

shortage

when quantity demanded is more than quantity supplied (excess demand)

bartering

how people acquire goods and services without money, used in a traditional economy.

Karl Marx

philosopher and political economist known better as a communist and author of the Communist Manifesto

Federal Reserve

supervises and regulates banks, implements monetary policy, controls the amount of currency in circulation, and sets reserve ratios

inflation

a general increase in prices

equilibrium

the point at which quantity demanded and quantity supplied are equal

Natural monopoly

a market that runs most efficiently when one large firm supplies all the output, like public water

sole proprietorship

a business owned and managed by a single individual

bank

an institution for receiving, keeping, and lending money

stock split

when each single share of stock splits into more than one share, used to encourage investors to buy stock.

Demand Side Economics

the idea that government spending and tax cuts help an economy by raising demand

Communist Manifesto

lays out the foundation for communism by describing the conflict between the proletariat and the bourgeois as leading to revolution

Trickle Down Economics

investing money in companies and giving them tax breaks will benefit the economy because eventually, consumers will experience the effects.

New York Stock Exchange

the country's largest and most powerful exchange

skilled labor

demands advanced skills and education

right to work

this is a measure that bans mandatory union membership, NC is one

surplus

when quantity supplied is more than quantity demanded (excess supply)

commodity

a product that is the same no matter who produces it

government monopoly

a monopoly created by the government

strike

organized work stoppage intended to force an employer to address union demands

monopolistic competition

a market structure in which many companies sell products that are similar but not identical

deflation

a substantial drop in prices

corporation

a legal entity owned by individual stock holders

bear market

when the stock market steadily falls over a period of time

price floor

a minimum price for a good or service

professional labor

requires specialized abilities and training to do tasks

arbitration

the neutral third party review the case and imposes a decision that is legally binding for both sides

horizontal merger

joining of two or more firms competing in the same market with the same good or service

semi-skilled labor

requires minimal specialized skill and education

NASDAQ

the American market for over the counter stocks

Federalists

believed a centralized banking system was necessary

commercial banks

offer checking services, accept deposits, and make loans

conglomerate

merging of more than three businesses that make unrelated products

capital gains

money made when an investor sells stock for more than he or she paid for it.

stockbrokers

link buyers and sellers of stock, work for a brokerage firm

dividends

a portion of a corporation's profit paid out to stockholders quaterly

expansionary policy

policy that during a recession or depression the government should increase spending or decrease taxes

vertical merger

joining of two or more firms involved in different stages of production of the same good or service.

Keynes

person who developed the idea of demand-side economics, which encourages government action to increase and decrease demand and output

multinational corporations

large corporations that produces and sells its goods and services throughout the world

savings and loans

originally created when members deposited funds into a general fund and then borrowed money to buy their own homes; now serves many of the same functions as a bank

mediation

neutral mediator meets with each side to try and find some solution and the decision reached is nonbinding

labor union

an organization that tries to improve working conditions, wages, and benefits for its members

capital loss

money lost when an investor sells stock for less than he or she paid for it or when a company doesn't make a profit or can't pay dividends

Antifederalists

wanted a decentralized banking system where banks were operated by the states

Credit Union

cooperative lending associations for particular groups (ex: state employees), usually small, specialize in home mortgages and car loans, some provide checking/saving property used to secure loan

collateral

property used to secure a loan

decrease

during times of recession and depression the Fed ______________ interest rates. (this encourages lending and discourages savings)

contractionary policy

policy that during inflation the government should decrease spending or increase taxes

increase

During times of inflation, the Fed _________ interest rates. (this encourages savings and discourages lending)

Richmond Federal

of the 12 Federal Reserve districts, NC belongs to this one

Dow Jones/ S&P 500

used to determine stock performance by either examining 30 large companies or 500 companies