Specialization

when people, businesses, regions, and/or nations concentrate on goods and services that they can produce better than anyone else

Incentives

rewards offered to try to persuade people to take certain economic actions

Agribusiness

generic term that refers to the various businesses involved in food production, including farming, seed supply, agrichemicals, farm machinery, sale of goods

Assembly Line

manufacturing process with interchangeable parts increase productivity

Scarcity

when you don't have enough resources to produce all the things you want

Tradeoff

opportunity costs, what economic choices make us give up

Robotics

a process where robots put together parts on an assembly like

labor

Human effort directed toward producing goods and services

White/Blue Collar

Blue collar is typically laborious jobs and gets paid hourly wage, while white collar is "white collar and tie", is paid a salary

Supply

The quantity of something that producers have available for sale

Demand

the desire to own something and the ability to pay for it

Surplus

A situation in which quantity supplied is greater than quantity demanded

Shortage

A situation in which quantity demanded is greater than quantity supplied

price change

movement along the curve

competition

the struggle among producers for the dollars of consumers

equilibrium price

the price that balances quantity supplied and quantity demanded

market economy

free enterprise/ capitalism, economic system in which businesses and consumers, not the government, decide what is produced

command economy

planned economy, an economic system in which the Government controls everything in the economy.

Traditional Economy

the least developed type of economy because it makes economic decisions the way it has always been. It is based on tradition, custom, and the way things have always been done. They have not changed very much over time. (Bartering is used)

mixed economy

an economic system that incorporates the characteristics of several different economic systems.

Henry Ford and the Assembly Line

American businessman, founder of Ford Motor Company, father of modern assembly lines, and inventor credited with 161 patents.

Price Floor/Ceiling

a government-mandated minimum or maximum price for a product

minimum wage

a minimum price that an employer can pay a worker for an hour of labor

complement goods

Two or more goods that tend to be used together. An increase in the price of one will lead to a decrease in the demand of the other.

substitute goods

Products or services that can be used in place of each other. When the price of one falls, the demand for the other product falls; conversely, when the price of one product rises, the demand for the other product rises.

Monopoly

only having one provider of a product or service in a market

Oligopoly

A market structure in which a few large firms dominate a market

profit motive

the force that encourages people and organizations to improve their material well-being

opportunity cost

what you cannot buy or do when you choose to do or buy one thing rather than another.

Inflation

A general and progressive increase in prices

adam smith

Scottish economist who wrote the Wealth of Nations, a precursor to modern Capitalism.

invisible hand

term economists use to describe the self-regulating nature of the marketplace

laissez faire

Idea that government should play as small a role as possible in economic affairs.

Wealth of Nations

This is the 18th century book written by Scottish economist Adam Smith in which he spells out the first modern account of free market economies.

Karl Marx

Father of Communism, wrote the Communist Manifesto

Communist Manifesto

A socialist manifesto written by Marx and Engels (1848) describing the history of the working-class movement according to their views.

John Maynard Keynes

English economist who advocated the use of government monetary and fiscal policy to maintain full employment without inflation

fiscal policy

Government policy that attempts to manage the economy by controlling taxing and spending.

deficit spending

Government practice of spending more than it takes in from taxes

golden parachute

a large payment or other financial compensation guaranteed to a company executive should the executive be dismissed as a result of a merger or takeover.

cold war

A conflict that was between the US and the Soviet Union. The nations never directly confronted each other on the battlefield but deadly threats went on for years.

bartering

Exchanging products or services with others by agreeing on their values without using money.

Example of monopolies

U.S Steel, Microsoft

examples of oligopolies

Ford, Dodge

merger

when companies join together to become more powerful

cost-benefit analysis

a study that compares the costs and benefits to society of providing a public good

invention

something that is made for the first time

innovation

An improvement of an existing technological product, system, or method of doing something.

3 economic questions

What to produce? How to produce? For whom to produce?

4 factors of production

land, labor, capital, entrepreneurship

vertical merger

You control all phases of production from the raw material to the finished product

horizontal merger

Buy out your competition until you have control of a single area of industry