Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
22 Cards in this Set
- Front
- Back
Adam Smith
|
Scottish philosopher and economist who wrote The Wealth of Nations. Considered the father of economics
|
|
Mercantilism
|
economic theory that emphasized the importance of stockpiling gold and silver to the economic power of a nation. encouraged exports and restricted imports
|
|
command system
|
economic system in which the allocation of resources is heavily controlled by government instead of free market forces
|
|
Navigation Acts
|
economic regulations passed by the British Parliament that said that all trade had to go through Britain so money would flow into motherland
|
|
capitalism
|
philosophy of a free market economy in which the government serves only to create an acceptable environment in which to make exchanges
|
|
The Wealth of Nations
|
criticized mercantilism and proposed a free market economy in which the "invisible hand" determined prices
|
|
market economy
|
forces of individual self-interest regulate the economy, eliminates need for most governmental interventions
|
|
exchange
|
trade between two parties
|
|
role of money
|
facilitates exchange, eliminates need for "coincidence of wants"
|
|
coincidence of wants
|
when two parties each possess something desired by the other, promoting an exchange
|
|
specialization
|
economic practice of focusing resources on production of one or a few goods
|
|
perfect competition
|
when buyers and sellers have no influence on price and terms of exchange
|
|
collusion
|
when sellers conspire to maintain a high price and avoid competing with one another
|
|
monopoly
|
when one person captures enough market power to control/manipulate prices; lack of competition
|
|
law of supply
|
as price rises, suppliers will produce more
|
|
law of demand
|
as price rises, individuals will buy less
|
|
role of prices
|
determine quantitiy of goods supplied
|
|
role of profits
|
as profits increase, number of suppliers and resources for making tht good will increase
|
|
equilibrium price
|
price at which the amount demanded equals the amount supplied
|
|
shortage
|
when the amount demanded is greater than the amount supplied
|
|
surplus
|
when the amount supplied is greater than the amount demanded
|
|
laissez-faire
|
policy in which there is little or no interference with exchange, trade, or market prices by the government
|