Lauren Powell

Economics Final Review

1. Consumer Sovereignty the power of consumers to decide what gets

produced
2. GDP (Gross Domestic Product) The total value of all final goods and
services produced in an economy.
3. Advantages and Disadvantages of Sole Proprietorship - Advantages:
Ease of Startup, Relatively Few Regulations, Sole Receiver of Profit, Full
Control, Easy to Discontinue. Disadvantages: Unlimited Personal Liability,
Limited Access to Resources, Lack of Permanence.
4. Advantages of Prices Price as an Incentive, Prices as Signals, Flexibility,
Price System is Free
5. NASDAQ- ( National Association of Securities Dealers Automated Quotations)
the American market for over- the counter securities.
6. Oligopoly a market dominated by a few large, profitable firms. Economists
usually call an industry an oligopoly if the four largest firms produce at least
70 to 80 percent of the output.
7. Scarcity limited quantities of resources to meet unlimited wants. Pg 4
8. SEC (Securities and Exchange Commission) a federal agency that regulates
the stock market. Pg 198. An independent government agency that regulates
financial markets and incestment companies. It enforces laws prohibiting
fraud and other dishonest investment practices.
9. Collectives- large farm leased from the state to groups of peasant farmers.
Pg. 36
10.Adam Smith A Scottish social philosopher who, in 1776, published The
Wealth of Nations in which he descrived how the market functions. He called
for laissez faire, let them do as they please. Restricted government
envolvement in the economy. Pg 33. Free Market Economy
11.Advantages and Disadvantages of Partnership Advantages: Ease of
Startup, Shared decision Making and Specialization, Larger pool of capital,
taxation. Disadvantages: Unlimited Liability, Potential for Conflict. Pg 191192.
12.TANF- (Temporary Assistance for Needy Families) It eliminated cash
assistance for poor families. Instead the federal government provides block
grants, or lump sums of money, to the states. Sets a 5 year limit on receipt of
benefits.
13.Price Ceiling the maximum price that can be legally charged for a good.
14.WTO- (World Trade Organization) founded in 1995 to ensure compliance with
GATT(General Agreement on Tariffs and Trade) , to negotiate new trade
agreements, and to resolve trade disputes. Pg 454.

15.Franchise A contract issued by a local authority that gives a single firm the
right to sell its food within an exclusive market. Pg 159. Advantages and
Disadvantages pg 202.
16.3 Economic Questions- ?
17.NYSE (New York Stock Exchange) The countrys largest and most
powerful stock exchange. The NYSE handles stock and bond transactions for
only the largest and most established companies in the country. The largest
and best-known companies listed on the NYSE are referred to as blue chip
companies. Blue chip stocks are often in high demand because investors
expect the companies to continue to do business profitably for a long time.
18.
Four Conditions for Perfect Competition
1. Many Buyers and sellers participate in the market.
2. Sellers offer identical products
3. Buys and sellers are well informed about products.
4. Sellers are able to enter and exit the market freely.
19.Types of Bonds:
1. Savings Bond
2. Treasury Bonds, bills and Notes
3. Municipal bonds
4. Corporate Bonds
5. Junk Bonds
20.Export A good sent to another country for sale
21.Partnership Types:
1. General Partnership
2. Limited Partnership[
3. Limited Liability Partnership
22.CPI- (Consumer Price Index) A price index measuring the price of a standard
group of goods meant to represent the Market Basket of a typical urban
consumer. Price Index a measurement that shows how the average price of
a standard group of goods changes over time.
23.Economics- the Study of how people seek to satisfy their needs and wants
by making choices.
24.A Person has an absolute advantage when it can produce more of a given
product using a given amount of resources. A country has a comparative
advantage in the product that it can produce most efficiently given all the
products it could choose to produce.
25.Inflation- A general increase in prices. Causes of:
1. The Quantity Theory- states that too much money in the economy causes
inflation.
2. Demand-Pull Theory- states that inflaton occurs when demand for goods
and services exceeds existing supplies.
3. Cost-Push Theory- Inflation occurs when producers raise prices in order to
meet increased costs.
26.CD- (Certificates of Deposits) A special kind of savings account that pays
a higher rate of interest than do savings and checking accounts.
27.Causes of Poverty:

1. Lack of Education
2. Location
3. Racial and Gender Discrimination
4. Economic Shifts
5. Shifts in Family Structure
28.Karl Marx Focused on the disorders of a free market economy. Wrote the
Communist Manifesto, and Das Kapital a study of the economics of
capitalism.
29.Theories for Inflation- Above Number 25.
30.Opportunity Cost- the most desirable alternative given up as the result of a
decision.
31.Great Crash The great crash of 1929, a horrifying collapse of the stock
market. Pages 290-291.
32.Trade Barrier Effects They limit supply, Increased Prices for Foreign
Goods, Trade Wars.
33.Ways to Measure Development
1. Per Capita GDP
2. Energy Consumption
3. Labor Force
4. Consumer Goods
5. Literacy
6. Life Expectancy
7. Infant Mortality Rate
34.Shortage A situation in which quantity demanded is greater than quantity
supplied, also known as excess demand.
35.Types of Economies:
1. Traditional Economies
2. Market Economies
3. Command Economies
4. Mixed Economies