Economics

1. Economics Final Exam Review

2. Use of fewer resources than an economy is capable of using. • Underutilization

3. Something essential for survival. • Need

4. Effort people devote to tasks for which they are paid. • Labor

5. The extra cost of adding one unit. • Marginal Cost

6. The most desirable alternative given up as the result of a decision. • Opportunity Cost

7. Principle that limited amounts of goods and services are available to meet unlimited wants. • Scarcity

8. The extra benefit of adding one unit. • Marginal Benefit

9. All natural resources used to make goods and services. • Land

10. When government sells and gives control of a business to individual investors. • Privatization

11. Struggle among producers for the dollars of consumers. • Competition

12. Power of consumers to decide what gets produced. • Consumer Sovereignty

13. Doctrine that government generally should not intervene in the marketplace. • Laissez-Faire

14. Concentration of productive efforts on a limited number of activities. • Specialization

15. Hope of reward or fear of penalty that encourages a person to behave in a certain way. • Incentive

16. Amount of money a business receives in excess of its expenses. • Profit

17. Organization that uses resources to produce a product or service, which it then sells. • Firm

18. Principle that people have the right to control their possessions and use them as they wish. • Private Property Rights

19. Government aid to the poor. • Welfare

20. Goods and services provided for free or at greatly reduced prices. • In-Kind Benefits

21. Principle that people may decide what agreements they want to enter into. • Free Contract

22. Commitment to the value of work. • Work Ethic

23. The principle that everyone has the same legal rights. • Legal Equality

24. Direct payments of money by the government to the poor, disabled, or retired people. • Cash Transfers

25. Right of a government to take private property for public use. • Eminent Domain

26. Two goods that are bought and used together. • Complements

27. Table listing the quantity of a good that all consumers will buy at various prices. • Market Demand Schedule

28. Measure of how consumers respond to price changes. • Elasticity of Demand

29. Goods that are used in place of one another. • Substitutes

30. Entire amount of money a company receives by selling goods or services. • Total Revenue

31. Change in consumption that results when a price increase causes real income to decline. • Income Effect

32. Consuming less of a good and more of another as a reaction to a price increase. • Substitution Effect

33. Not very sensitive to price changes. • Inelastic

34. Graph of the quantity supplied of a good at various prices. • Supply Curve

35. Amount of goods available. • Supply

36. Government intervention in a market that affects the production of a good. • Regulation

37. Chart that lists how much of a good a supplier will offer at various prices. • Supply Schedule

38. Sum of fixed costs plus variable costs. • Total Cost

39. Cost that rises or falls depending on the quantity produced. • Variable Cost

40. Tax on the production or sale of a good. • Excise Tax

41. Government payment that supports a business or market. • Subsidy

42. The amount of goods a firm has on hand. • Inventory

43. A product that is popular for a short period of time. • Fad

44. A sudden lack of availability of a good. • Supply Shock

45. The point at which the demand for a product or service equals the supply. • Equilibrium

46. Government allocation of goods and services. • Rationing

47. When quantity demanded is greater than quantity supplied. • Shortage

48. When the demand curve moves left or right. • Change in Demand

49. A price ceiling placed on the amount people pay for housing. • Rent Control

50. Illegal agreement among firms to divide the market, set prices, or limit production. • Collusion