CSET 3 Social Science 100% SOLUTION

CSET 3 Social Science 100% SOLUTION Why is self-interest good? - ANSWER WIPIM Wealth Innovation Productivity Investment More for all What factors affect demand? - ANSWER SERPIP Substitute goods Expectations of Prices Related Goods Population Income Preferences What factors affect supply? - ANSWER IREST Input prices (wages, traveling, equip) Related goods Expectations of prices Supplier numbers Technology GDP - ANSWER Size of the economy; total amount of all goods produced GNP - ANSWER Total amount of all goods produced by the country even if it's outside the country Inflation - ANSWER Increase in prices + decrease in value of money Judicial Review - ANSWER Inferred from Constitution Opportunity Cost - ANSWER the loss of potential gain from other alternatives when one alternative is chosen Law of Diminishing Returns - ANSWER used to refer to a point at which the level of profits or benefits gained is less than the amount of money or energy invested Economies of Scale - ANSWER Economies of scale arise because of the inverse relationship between the quantity produced and per-unit fixed costs; i.e. the greater the quantity of a good produced, the lower the per-unit fixed cost because these costs are spread out over a larger number of goods World Trade Organization - ANSWER Goal = trade flows smoothly World Bank - ANSWER The World Bank is an international financial institution that provides loans to countries of the world for capital programs. Scarcity - ANSWER Unlimited human wants but limited resources Marginal Benefit - ANSWER Marginal Benefit (MB) is defined as the maximum amount a customer is willing to pay for an incremental unit consumption. In other words, MB represents the utility that the customer associates with the consumption of an extra unit of the product. Decreases when you consume more Increases when you consume less Marginal Cost - ANSWER additional cost incurred for the production of an additional unit of output. The formula is calculated by dividing the change in the total cost by the change in the product output. Monetary and Non-Monetary Benefits - ANSWER Monetary- cash bonuses, stock options, profit-sharing and any other type of reward that increases an employee's compensation. Non-monetary-Opportunities can include time off from work, flexible work schedules or even positive changes in the work environment. Role of Private Property - ANSWER Allows people to use resources as they want Role of property rights in a market economy - ANSWER Exclusive authority to determine how a resource is used, right to the services, right to allocate Role of competition in a market economy - ANSWER 1. more choices 2. Improves the quality of products through the efficient use of resources 3. Enhances economic growth through increased investments. Role of profit in a market economy - ANSWER 1. Investment in research & develop. 2. Reward for stockholders 3. Attract new firms 4. Tax revenues 5. Incentives Market Price - ANSWER Price of a commodity when sold in a certain market Price Controls - ANSWER A government regulation establishing a minimum or maximum price to be charged for specified goods and services, especially during periods of war or inflation. On food or energy products. Monetary Policy - ANSWER process by which the monetary authority of a country, like the central bank or currency board, controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency. Efficiency vs. Equality - ANSWER 1. Efficiency- optimal production and allocation of resources 2. Equality- how resources are distributed throughout society Modern problems- land development, resource availability, environmental quality, composition of the economy - ANSWER 1. Dependency on oil Unions Effects - ANSWER Pros: members Cons: consumers, job opportunities/availability, slow down economic recovery Effects of international mobility of capital, labor, and trade on the U.S. economy - ANSWER Unemployment Effect