Economics

• Law of Supply - as the price of a good increases, a greater quantity of the good will be supplied
• What is an example of Law of Supply?


  If gum increases from $1 a piece to $10 a piece, then more suppliers would supply gum.
• Progressive Era


  The rapid economic expansion of the Second Industrial Revolution also led to an increase in the difference between the haves and the have-nots, as well as the growth of oligopolies and monopolies
• Importing


  buying from other countries
• Trade Barriers


  obstacles to trade
• OPEC (Organization of the Petroleum Exporting Countries)


  An international organization of countries that produce the majority of the world's oil supply. Current member states range in location from South America to central Africa with the majority of member states located in the Middle East.
• Retaliatory Tariff


  when Country A places a tariff on Country B’s imports because Country B placed a tariff on Country A’s imports
• Trade


  the exchange of products for money between entities
• Spindletop


  An oil derrick in Beaumont, Texas that became the most productive derreck in the world in 1901, producing over 100,000 barrels in a day and bringing a boom to Texas' oil and gas industry
• Smoot-Hawley Tariff Act


  Tariffs passed in 1930[date] on over 20,000 imported goods with the intention of protecting American jobs, but resulted in decreased international trade
• Adam Smith


  The father of capitalism. Wrote "An Inquiry into the Nature and Causes of the Wealth of Nations." Argued that an invisible hand guides the economy to its greatest productivity.
• Purchasing Power


  the ability to buy goods
• Macroeconomics


  The design and function of the economy as a whole
• Cost-Benefit Analysis


  systematic approach used to evaluate the potential benefits and costs of a proposed project, investment, or decision, aiming to determine whether the benefits outweigh the costs and justify the undertaking
• Globalism


  Economic and foreign policy planning on a global basis
• Age of Exploration


  A period of time from the early 15th Century until the early 17th Century in which European ships traveled around the world in search of new trading routes.
• World Wars


  WWI and WWII occuring overseas (with the exception of Pearl Harbor) allowed the US to maintain and grow its production capacity, leading to massive economic expansions
• Means of Production


  The non-human resources used to produce goods in an economy
• Comparative Advantage


  The ability of an entity to produce a good or service at a lower opportunity cost than another entity.
• This is an example of comparitive advantage. Company A produces 10 tons of wheat and B produces 5 tons. If they both switch to cotton, each could produce 5 tons. Company B has the comparative advantage of producing cotton because they would give up less wheat for the same output of cotton.
• Traditional Economy


  An economy where goods are produced mainly for consumption by one's own family and traded or bartered in only the most basic ways
• An example of Traditional Economy is 


  a community mostly practicing subsistence farming
• Dividends


  periodic payments made by a corporation to its shareholders, usually in the form of cash or additional shares, representing a portion of the company's earnings
• Absolute Advantage

  The ability of an entity to produce more of a good or service than another entity using the same amount of resources.
• An example of Absolute Advantage is


  If person A can produce 10 widgets with 10 tools and person B can produce only 5 widgets with 10 tools, person A has the absolute advantage of making widgets.
• Surplus


  when the quantity supplied is greater than the quantity desired

  
• Price Ceiling


  the maximum price that can be charged for a good as determined by a government or other entity responsible for economic regulation
• Black Plague / Black Death


  An outbreak of the Bubonic Plague. A deadly epidemic that struck Europe in the mid-1300's and killed millions.
• Second Industrial Revolution


  the unprecedented increase in economic productivity during the late 1800s. Included large leaps forward in technology with expansion of use of electricity, petroleum, and steel.
• Factor Market


  a market in which the factors of production are bought and sold
• An example of Factor Market is


  The labor market
• Command Economy


  government controls the economy, determining what should be produced and how much should be produced. This type of economy is most closely associated with communism.
• The New Deal


  A series of policies, public work projects, and financial reforms passed by Franklin D. Roosevelt between 1933 and 1936 in an attempt to stimulate the economy
• An example of the New Deal is 


  Social Security, unemployment benefis, FDIC
• Free Trade


  the ability for one country to trade with another without hindrance so that all goods can be produced with the greatest efficiency
• An example of Free trade is


  Removing tariffs on imports and exports creates a free trade scenario
• Disequilibrium (of a Market)


  when either the quantity supplied or the quantity desired exceeds the other
• North American Free Trade Agreement (NAFTA)


  A trade agreement that created a free trade zone between the US, Canada, and Mexico
• Gross Domestic Product (GDP)


  The total value of all domestic production in a country. GDP sums up the market value of all final goods and services produced in a nation within one year
• Price Control


  a maximum or minimum limit on the price of a good instituted by the government