Unit 1 test prep! Chapter 1,2,3,8

Vocab: Scarcity Need Want Fundamental economic problem facing all societies, resulting from a combination of scarce resources and people’s virtually unlimited needs and wants Need a basic requirement for survival, (food clothing shelter) Want A want is not necessary for survival Factors of Production: Resources required to produce things we would like to have. Land: Labor Capital Entrepreneur Vocab:

Vocab Productivity Economics Economic Systems Social Security Measure of the amount of output produced in a specific time period with a given amount of resources; normally refers to labor, but can apply all factors of production Economics Social science dealing with how people satisfy seemingly unlimited and competing needs and wants with the careful use of scarce resources. Economic Systems Command, Market, Tradition, Mixed : use your Economic Systems chart. Social Security Federal program of disability and retirement benefits that covers most working people. Inflation Sustained rise in general level of prices of goods and services. Fixed Income Income that does not increase over time Private Property Rights People may own and control their own possessions Vocab

Vocab Profit Profit Motive Voluntary Exchange Competition Extent to which people are better off in the end Profit Motive Force that encourages people to make business ventures Voluntary Exchange Buyers and sellers actively exchanging in the market on their own Competition Struggle among sellers to attract customers while lowering costs Consumer Sovereignty Role of consumer as ruler of the market in determining the types of goods and services produced. Charter Gov’t document that gives company permission to create a corporation Stock Certificate of ownership in a corporation Dividend Check paid to stockholders, usually quarterly representing a portion of the corporate profits Vocab

Vocab Merger Depreciation Horizontal Merger Vertical Merger A combination of two or more businesses to form a single firm. Depreciation is a noncash charge for the general wear and tear on capital goods. Horizontal Merger Combination of firms producing the same kind of product. Vertical Merger Combination of firms involved in different steps of manufacturing marketing, or sales. Conglomerate are firms that have at least four businesses that make unrelated products, none of which is responsible for a majority of sales. Multinational can move resources, goods, services, and financial capital across national borders. Labor Union Organization of workers formed to represent member’s interests of employment matters Vocab

Cooperative Voluntary association of people formed to carry of economic activity benefiting its members. Professional Association Group of specialized occupation that works to improve condition and skills of employment Public Utility Credit Union Service CO-OP Cash Flow comprehensive measure of its profits because it represents the total amount of after-tax income generated by the company operations. Vocab

Every choice has a opportunity cost and Trade-0ff Know the difference Economic Growth increases the PPF Division of labor = assembly line Economic Questions What, How, Whom Resources inside the PPF are IDLE, or Insufficient Utility- satisfaction Common Stock get to vote GM is a multinational Double taxation is a disadvantage of Multinationals

MEA=Professional Association BP + Speedway would be a horizontal merger Goals of Capitalism Characteristics of Capitalism Economic Freedom, Voluntary Exchange, Private Property Rights, Profit Motive, Competition

Competition keeps quality high and prices low Social Security will pay for people injured. Sole proprietorship #1 business in America