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Economics

Economics. Final Exam Review. Use of fewer resources than an economy is capable of using. Underutilization. Something essential for survival. Need. Effort people devote to tasks for which they are paid. Labor. The extra cost of adding one unit. Marginal Cost.

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Economics

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  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

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