ECO 2013 Final FSU Part I (Ch 1, 2, 3, 7, 8)
absolute advantage - ANS-being able to produce a good using the fewest resources
business cycle - ANS-graph that shows the ups and downs of the economy over the years
business cycle peak - ANS-highest point in the business cycle (economic boom)
business cycle trough - ANS-lowest point in the business cycle (recession)
capital - ANS-anything man-made that is used to produce or create other things
capitalism - ANS-economic system in which productive resources are owned privately and
goods and resources are allocated through market pricing
change in demand - ANS-when consumers buy a different amount/good because of a change in
anything but price (income, feelings, expectations, etc.)
change in quantity demanded - ANS-when consumers buy a different amount/good than before
because of price changes
consumer price index (CPI) - ANS-number used to compare costs of purchasing lists of good
that a typical consumer might buy in one period to that same list of goods in a different time
period
consumer surplus - ANS-difference between the maximum price consumers are willing and able
to pay and what they actually pay
contractionary phase - ANS-when GDP is declining in the business cycle
creative destruction - ANS-new products/methods of production replacing old ones
cyclical unemployment - ANS-occurs when the economy is doing poorly, employment decreases
in many sectors
demand - ANS-schedule of all goods/services consumers are willing and able to buy at various
prices
economic efficiency - ANS-a state in which all potential gains from trade have been realized.
employment to population rate - ANS-number employed out of the total population (E/P x 100)
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