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Holt Economics Chapters 1-6

Chapter 1 Terms

Economics
The study of how a society chooses to use scarce resources to satisfy unlimited wants and needs.
Microe­con­omics
The study of a single factor of an economy - such as indivi­duals, househ­olds, busine­sses, and industries
Macroe­con­omics
The study of the economy as a whole or one of its principal sectors
Consumer
Indivi­duals or groups that purchase and use goods to satisfy their wants and needs.
Producer
Indivi­duals or businesses that create goods and services to meet consumer demand.
Goods
A tangible object or material that can be purchased to satisfy human wants or needs.
Services
An intangible action or activity that is performed for a fee to satisfy human needs and wants.
Resources
Anything used to produce goods or services
Technology
Scientific and technical techniques used to produce existing products more effici­ently or of higher quality
Entrep­ren­eurship
The organi­zat­ional abilities and risk taking involved in starting a new business or introd­ucing a new product to consumers
Scarcity
The fundam­ental condition of economics that results from the combin­ation of limited resources and unlimited wants.
Specia­liz­ation
The focus of a worker on only one or a few aspects of production in order to improve efficiency
Money
Any item, typically currency, that is commonly accepted in exchange for goods, services, or settling debts.
Credit
A form of exchange that allows consumers to use items with a promise of repayment over a specified time

Chapter 4 Terms

Law of Supply
As the price of a good increases, the quantity supplied increases, and vice versa
Cost of Production
The total cost of materials, labors, and other inputs required in the manufa­cture of a product
Tax
A required payment to a local, state, or national govern­ment, usually made on some regular basis
Law of Dimini­shing Returns
The principle that as more of one input is added to a fixed supply of other resources, produc­tivity will increase up to a point, after which the marginal product will diminish
Marginal Cost
The cost of producing one additional unit of output

Chapter 6 Terms

Monopoly
A market in which a somgle seller exercises exclusive or nearly exclusive control over a particular good or service
Oligopoly
A market in which a few large sellers control most of the production of a good or service
Collusion
An effort by producers or sellers of a particular product to secretly set production levels or prices
Cartel
A group of producers or sellers of a certain good or service who unite to control prices, output, and market share
Antitrust Legisl­ation
Federal and state laws that regulate big business and labor unions to prevent or dismantle monopolies
Product Differ­ent­iation
An attempt by a seller in monopo­listic compet­ition to convince buyers that its product is different from and superior to the nearly identical products of compet­itors
 

Chapter 2 Terms

Tradit­ional Economy
An economy in which production is based on customs and tradit­ions.
Market Economy
An economy in which the government has little to say in what, how, and for whom goods are produced and in which the factors of production are owned by indivi­duals
Market
The free exchange of goods and services
Mixed Economy
An economy that combines elements of the tradit­ional, market, and command economic models
Democratic Socialism
An economic system in which some means of producing and distri­buting goods are owned or controlled by an elected government
Captit­alism
A market­-based economic system in which indivi­duals own and control the factors of production
Communism
An economic system in which the government owns or controls nearly all factors of production
Free Enterprise
A system in which private business operates with minimal government involv­ement
Private Property
Property that is owned by indivi­duals or businesses , rather than by the government
Income
Money received, especially on a regular basis, for working or through invest­ments
Standard of Living
People's economic well-being as determined by the quantity of goods and services they consume in a given time period.

Chapter 3 Terms

Law of Demand
As the price of a good decreases, the quantity demanded increases, and vice versa
Income Effect
The effect that a change in an item's price has on consumers' ability to purchase goods.
Substi­tution Effect
Consumers' tendency to substitute a lower-­priced good for a similar, higher­-priced one
Demand Curve
A graphic repres­ent­ation of a demand schedule, showing the relati­onship between the price of an item and the quantity demanded during a given time period.
Elasticity of Demand
The degree to which changes in price of a good or service affect quantity de,amded

Chapter 5 Terms

Market Failure
A flaw in a price system that occurs when some costs have not been accounted for and therefore are not properly distri­buted
Market Equili­brium
The point at which the quantity demanded and the quantity supplied for a product are equal at the same price
Surplus
When the quantity supplied exceeds the quantity demanded at a given price
Shortage
When the quantity demanded exceeds the quantity supplied at a given price
Price Ceiling
A government regulation that sets a maximum price for a particular good
Rationing
A system by which a government or other instit­ution decides how to distribute a good service; rationing is usually the result of limited supply
 

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