History 7-12 PACT test Study Guide.
Pure competition
Economic model that describes a hypothetical market form in which neither the producer or consumer
has the market power to influence prices. Defines a market equilibrium in which all resources are
allocated and used efficiently, and collective social welfare is maximized.
monopolistic competition
Common market from where there are many producers and consumers, consumers perceive that there
are non-price differences in the products, few barriers to entry and exit, and producers have a degree of
control over price. Markets for restaurants, cereal, shoes, clothing, and services in large cities.
Oligopoly
A market form in which a market or industry is dominated by a small number of sellers. When
oligopolists in the same market collide and agree to raise prices and restrict production, a cartel forms.
Monopoly
Market form that exists when a specific individual or enterprise has sufficient control over a particular
product or service to significantly determine the terms on which other individuals shall have access to it
Partnership
Business entity in which partners (owners) share with each other the profits and losses of the business
undertaking in which all have invested.
Corporation
Am institution that is granted a charter recognizing it as a separate legal entity having its own privileges,
and liabilities distinct from those of its members. There are many different forms of corporations, most
of which are used to control business.
Copernicus
Polish astronomer (1473-1543) Who was the first to formulate a scientifically-based heliocentric
cosmology that displaced the earth from the center of the universe. This theory is considered the
epiphany that begin the scientific revolution
Galileo
Italian physicist, mathematician, astronomer, and philosopher (1564-1642). Father of modern
observational astronomy, modern physics, science, and modern science
Sir Isaac Newton
,English physicist, mathematician, astronomer, natural philosopher, alchemist, and theologian (1643-
1727). Published works in 1687 describing universal gravitation, and the three laws of motion, laying the
groundwork for classical mechanics
Marie Curie
Polish physicist and chemist (1867-1934). Pioneer in the field of radioactivity, and is the first and only
person awarded the Nobel prize in two different sciences
Thomas Edison
American inventor and businessman (1847-1931). Prolific US patent holder with 1093 to his name
including the phonograph and the long-lasting lightbulb
Albert Einstein
German born theoretical physicist (1879-1955). Best known for his theory of relativity and his theory of
energy equivalence. Received Nobel prize in 1921 for physics
Sole Proprietorship
A type of business entity which is owned and run by one individual and where there is no legal
distinction between the owner and the business. All profits and all losses accrue to the owner (subject to
taxation). All assets of the business are owned by the proprietor and all debts of the business are their
debts and they must pay them from their personal resources. This means that the owner has unlimited
liability. Owner has no partners
absolute advantage
Occurs when an individual or entity can produce a good using fewer resources than another country or
entity
comparative advantage
Theory that shows that even if a country or entity has no absolute advantage in producing any good, it
can still benefit by exporting the products by which it has the lowest opportunity cost of production
Justinian's Code
Modern name for a collection of fundamental works in jurisprudence issued from 529 to 534 by order of
Justinian 1, Byzantine Emperor
Magna Carta
English charter originally issued and 1215. Required king renounce certain rights, respect certain legal
rights, and accept that his actions could be bound by law. Most significant early influence on
constitutional law
2 Treatises of Government
Published anonymously by John Locke in 1689. First treatise attacks patriarchalism, and the second
treatise outlines the theory of civil society based on national rights and social contract
, Authoritarianism
A form of social control characterized by strict obedience to the authority of a state or organization,
often maintaining and enforcing control through use of oppressive forces
Tolalitarianism
Concept used to describe political systems where state regulates nearly every aspect of public and
private life (Nazi Germany, Fascist Italy, hard-line communist regimes)
Scarcity
Economically, the problem of infinite human needs and wants in a world of finite resources
opportunity cost
The basic relationship between scarcity and choice. The sacrifice incurred by choosing one option over
an alternative that may be equally desired. All choices have an opportunity cost
John Maynard Keynes
British economist (1883-1946) Who is considered the father of modern macroeconomics. Advocate
interventionist policy of government, by which the government would use fiscal and monetary measures
to mitigate adverse effects of economic recessions, depressions, and booms
Adam Smith
Pioneering economic theorist (1723-1709). Father of economics. Explained how rational self-interest and
competition, operating in a social framework which ultimately depends on adherence to moral
obligations, can lead to economic well-being and prosperity
Traditional Economy
System in which resources are allocated by inheritance, which has a strong social network and is based
on primitive methods and tools. Found in underdeveloped regions of South America, Asia, and Africa
command economy
System in which the state controls all aspects of the economy and makes all decisions about wealth
distribution and the use of the economy. Found in communist states
market economy
System in which The production and distribution of goods and services take place through the
mechanism of free markets guided by a free price system. There are no governments in which a true
market economy exists
13th Amendment (1865)
Amendment of 1865 abolishing and continually prohibiting slavery. With limited exception, such as those
guilty of committing a crime, it also prevents indentured servitude
14th Amendment (1868)
Pure competition
Economic model that describes a hypothetical market form in which neither the producer or consumer
has the market power to influence prices. Defines a market equilibrium in which all resources are
allocated and used efficiently, and collective social welfare is maximized.
monopolistic competition
Common market from where there are many producers and consumers, consumers perceive that there
are non-price differences in the products, few barriers to entry and exit, and producers have a degree of
control over price. Markets for restaurants, cereal, shoes, clothing, and services in large cities.
Oligopoly
A market form in which a market or industry is dominated by a small number of sellers. When
oligopolists in the same market collide and agree to raise prices and restrict production, a cartel forms.
Monopoly
Market form that exists when a specific individual or enterprise has sufficient control over a particular
product or service to significantly determine the terms on which other individuals shall have access to it
Partnership
Business entity in which partners (owners) share with each other the profits and losses of the business
undertaking in which all have invested.
Corporation
Am institution that is granted a charter recognizing it as a separate legal entity having its own privileges,
and liabilities distinct from those of its members. There are many different forms of corporations, most
of which are used to control business.
Copernicus
Polish astronomer (1473-1543) Who was the first to formulate a scientifically-based heliocentric
cosmology that displaced the earth from the center of the universe. This theory is considered the
epiphany that begin the scientific revolution
Galileo
Italian physicist, mathematician, astronomer, and philosopher (1564-1642). Father of modern
observational astronomy, modern physics, science, and modern science
Sir Isaac Newton
,English physicist, mathematician, astronomer, natural philosopher, alchemist, and theologian (1643-
1727). Published works in 1687 describing universal gravitation, and the three laws of motion, laying the
groundwork for classical mechanics
Marie Curie
Polish physicist and chemist (1867-1934). Pioneer in the field of radioactivity, and is the first and only
person awarded the Nobel prize in two different sciences
Thomas Edison
American inventor and businessman (1847-1931). Prolific US patent holder with 1093 to his name
including the phonograph and the long-lasting lightbulb
Albert Einstein
German born theoretical physicist (1879-1955). Best known for his theory of relativity and his theory of
energy equivalence. Received Nobel prize in 1921 for physics
Sole Proprietorship
A type of business entity which is owned and run by one individual and where there is no legal
distinction between the owner and the business. All profits and all losses accrue to the owner (subject to
taxation). All assets of the business are owned by the proprietor and all debts of the business are their
debts and they must pay them from their personal resources. This means that the owner has unlimited
liability. Owner has no partners
absolute advantage
Occurs when an individual or entity can produce a good using fewer resources than another country or
entity
comparative advantage
Theory that shows that even if a country or entity has no absolute advantage in producing any good, it
can still benefit by exporting the products by which it has the lowest opportunity cost of production
Justinian's Code
Modern name for a collection of fundamental works in jurisprudence issued from 529 to 534 by order of
Justinian 1, Byzantine Emperor
Magna Carta
English charter originally issued and 1215. Required king renounce certain rights, respect certain legal
rights, and accept that his actions could be bound by law. Most significant early influence on
constitutional law
2 Treatises of Government
Published anonymously by John Locke in 1689. First treatise attacks patriarchalism, and the second
treatise outlines the theory of civil society based on national rights and social contract
, Authoritarianism
A form of social control characterized by strict obedience to the authority of a state or organization,
often maintaining and enforcing control through use of oppressive forces
Tolalitarianism
Concept used to describe political systems where state regulates nearly every aspect of public and
private life (Nazi Germany, Fascist Italy, hard-line communist regimes)
Scarcity
Economically, the problem of infinite human needs and wants in a world of finite resources
opportunity cost
The basic relationship between scarcity and choice. The sacrifice incurred by choosing one option over
an alternative that may be equally desired. All choices have an opportunity cost
John Maynard Keynes
British economist (1883-1946) Who is considered the father of modern macroeconomics. Advocate
interventionist policy of government, by which the government would use fiscal and monetary measures
to mitigate adverse effects of economic recessions, depressions, and booms
Adam Smith
Pioneering economic theorist (1723-1709). Father of economics. Explained how rational self-interest and
competition, operating in a social framework which ultimately depends on adherence to moral
obligations, can lead to economic well-being and prosperity
Traditional Economy
System in which resources are allocated by inheritance, which has a strong social network and is based
on primitive methods and tools. Found in underdeveloped regions of South America, Asia, and Africa
command economy
System in which the state controls all aspects of the economy and makes all decisions about wealth
distribution and the use of the economy. Found in communist states
market economy
System in which The production and distribution of goods and services take place through the
mechanism of free markets guided by a free price system. There are no governments in which a true
market economy exists
13th Amendment (1865)
Amendment of 1865 abolishing and continually prohibiting slavery. With limited exception, such as those
guilty of committing a crime, it also prevents indentured servitude
14th Amendment (1868)
