{
 "source": "https://peabody.kids/flashcards/economics-concepts-high-school",
 "id": "economics-concepts-high-school",
 "title": "Economics: Micro and Macro Concepts",
 "category": "social-studies",
 "subject": "Economics",
 "levels": [
  "9-12",
  "college"
 ],
 "description": "Concepts from introductory microeconomics and macroeconomics, in plain wording.",
 "tags": [
  "microeconomics",
  "macroeconomics",
  "fiscal policy",
  "monetary policy"
 ],
 "frontLabel": "Concept",
 "backLabel": "Explanation",
 "cards": [
  [
   "Microeconomics",
   "The study of individual consumers, firms and markets"
  ],
  [
   "Macroeconomics",
   "The study of the whole economy: growth, inflation and jobs"
  ],
  [
   "Marginal analysis",
   "Weighing the added benefit and added cost of one more unit"
  ],
  [
   "Marginal cost",
   "The extra cost of producing one more unit"
  ],
  [
   "Marginal benefit",
   "The extra satisfaction from one more unit"
  ],
  [
   "Diminishing returns",
   "Adding more of one input eventually adds less output"
  ],
  [
   "Economies of scale",
   "Average costs fall as output grows"
  ],
  [
   "Price elasticity of demand",
   "How much quantity demanded changes when price changes"
  ],
  [
   "Elastic demand",
   "Buyers respond strongly to price changes"
  ],
  [
   "Inelastic demand",
   "Buyers respond little to price changes, like necessities"
  ],
  [
   "Substitute goods",
   "Goods that can replace each other, like butter and margarine"
  ],
  [
   "Complementary goods",
   "Goods used together, like printers and ink"
  ],
  [
   "Normal good",
   "A good you buy more of when income rises"
  ],
  [
   "Inferior good",
   "A good you buy less of when income rises"
  ],
  [
   "Determinants of demand",
   "Income, tastes, prices of related goods, expectations and number of buyers"
  ],
  [
   "Determinants of supply",
   "Input costs, technology, taxes and number of sellers"
  ],
  [
   "Price ceiling",
   "A legal maximum price"
  ],
  [
   "Price floor",
   "A legal minimum price, like a minimum wage"
  ],
  [
   "Deadweight loss",
   "Lost value when a market does not trade at the efficient level"
  ],
  [
   "Consumer surplus",
   "The difference between what buyers would pay and what they do pay"
  ],
  [
   "Producer surplus",
   "The difference between the price received and the lowest price a seller would accept"
  ],
  [
   "Perfect competition",
   "Many sellers, identical products and no control over price"
  ],
  [
   "Oligopoly",
   "A market with a few large firms"
  ],
  [
   "Monopolistic competition",
   "Many firms with differentiated products"
  ],
  [
   "Natural monopoly",
   "An industry where one firm can serve the market at the lowest cost"
  ],
  [
   "Antitrust law",
   "Laws that promote competition and limit monopolies"
  ],
  [
   "Public good",
   "Non-excludable and non-rival, like national defense"
  ],
  [
   "Free rider",
   "A person who benefits from a good without paying for it"
  ],
  [
   "Externality",
   "A cost or benefit that affects people who are not part of a transaction"
  ],
  [
   "Gross domestic product",
   "Total market value of goods and services produced in a country in a year"
  ],
  [
   "Real GDP",
   "GDP adjusted for inflation"
  ],
  [
   "Economic growth",
   "Increase in real GDP over time"
  ],
  [
   "Business cycle",
   "Recurring phases of expansion, peak, contraction and trough"
  ],
  [
   "Recession",
   "A significant decline in economic activity"
  ],
  [
   "Unemployment rate",
   "Percent of the labor force without a job but looking for one"
  ],
  [
   "Frictional unemployment",
   "Short-term joblessness while changing jobs"
  ],
  [
   "Structural unemployment",
   "Job loss because skills do not match available jobs"
  ],
  [
   "Cyclical unemployment",
   "Job loss caused by an economic downturn"
  ],
  [
   "Inflation",
   "A general rise in the price level"
  ],
  [
   "Consumer Price Index",
   "A measure of the average change in prices consumers pay"
  ],
  [
   "Fiscal policy",
   "Government spending and taxation to influence the economy"
  ],
  [
   "Monetary policy",
   "Central bank actions that influence interest rates and money supply"
  ],
  [
   "Federal Reserve",
   "The US central bank, created in 1913"
  ],
  [
   "Federal funds rate",
   "The interest rate banks charge each other overnight, a key policy tool"
  ],
  [
   "Stimulus",
   "Government action to boost the economy"
  ],
  [
   "Budget deficit",
   "When spending exceeds revenue in a year"
  ],
  [
   "National debt",
   "The total of past deficits the government owes"
  ],
  [
   "Progressive tax",
   "Higher earners pay a higher percentage"
  ],
  [
   "Regressive tax",
   "Lower earners pay a larger share of income"
  ],
  [
   "Aggregate demand",
   "Total demand for all goods and services in an economy"
  ],
  [
   "Aggregate supply",
   "Total goods and services producers will supply"
  ],
  [
   "Multiplier effect",
   "An initial spending change leads to larger changes in income"
  ],
  [
   "Comparative advantage",
   "Producing something at a lower opportunity cost than others"
  ],
  [
   "Absolute advantage",
   "Producing more of something with the same resources"
  ],
  [
   "Trade deficit",
   "Imports exceed exports"
  ],
  [
   "Exchange rate",
   "The price of one currency in terms of another"
  ],
  [
   "World Trade Organization",
   "International body that sets rules for trade"
  ],
  [
   "Gold standard",
   "Money tied to a fixed amount of gold"
  ],
  [
   "Adam Smith",
   "Author of The Wealth of Nations (1776), who described the 'invisible hand' of markets"
  ],
  [
   "Invisible hand",
   "Smith's idea that self-interested trading can benefit society"
  ],
  [
   "John Maynard Keynes",
   "Economist who argued governments should spend to fight depressions"
  ],
  [
   "Milton Friedman",
   "Economist who stressed the money supply and free markets"
  ],
  [
   "Karl Marx",
   "Writer who criticized capitalism and wrote Das Kapital"
  ],
  [
   "Human capital",
   "Skills and knowledge workers have"
  ],
  [
   "Labor force",
   "People working or looking for work"
  ],
  [
   "Minimum wage",
   "Lowest hourly pay allowed by law"
  ],
  [
   "Labor union",
   "Workers' group that bargains for pay and conditions"
  ],
  [
   "Productivity growth",
   "Rising output per worker, which raises living standards"
  ],
  [
   "Gig economy",
   "Short-term, flexible work done through apps and platforms"
  ],
  [
   "Supply chain",
   "The steps that move a product from raw materials to customers"
  ]
 ]
}