CLEP Macroecon Unit 1 part 2

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CLEP Macroecon Unit 1 part 2
2011-09-19 20:36:39
unit terms

unit 1 terms
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  1. law of demand
    the inverse relationship between price and quantity demand of a good or service
  2. law of supply
    if demand is held constant, an increase in supply leads to a decreased price, while a decrease in supply leads to a higher demand
  3. normal good
    a good whose demand increases or decreases when people's incomes increase or decrease
  4. substitute good
    goods that can replace each other, when the price of 1 increases, the demand for the other increases
  5. complementary good
    goods that are generally used together, when two price of 1 increases, the demand for the other decreases
  6. consumer sovereignty
    the ability of consumers to exercise complete control over what goods and services the economy produces (or doesn't produce) by choosing what goods and services to buy (or not buy)
  7. innovation
    an idea that eventually takes the form of new, applied technology
  8. entrepreneur
    a person who alone assumes the risks and uncertainties of a business
  9. laborer
    the workers, especially manual workers, in a country, company, or industry considered as a group
  10. unemployment
    the people who are unemployed in an area
  11. underemployment
    a situation in which a worker is employed, but not in the desired capacity, whether in terms of compensation, novis or level of skills/experience
  12. absolute advantage
    the ability of a producer of goods or services to conduct business more profitably or effeciently than any computer
  13. comparative advantage
    the country's ability to produce at a lower opportunity cost than the country with which it trades
  14. human capital
    the investment in workers health and knowledge, acquired through education, training, and/or experience that enhances their productivity
  15. economic efficiency
    the maximum possible production of goods and services generated by the fullest employment
  16. market equilibrium
    a situation in which the of the economy's supply of an item is exactly equal to its demand
  17. short run
    the time interval including several days
  18. long run
    the time interval including weeks, months, or years
  19. price discrimination
    the charging of different prices for the same product/service to different markets
  20. market day supply
    a market situation in which the quantity of a good supplied is fixed, regardless of price
  21. creative destruction
    economic growth is caused by entrepreneurs who take risks and destroy previous business practices by their innovations
  22. incentives
    something that encourages or motivates somebody to do something
  23. earned income tax credit
    a credit for certain low-income workers that is administered in the form of a federal income tax