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Sally starts a business that aims to produces parts for a local factory. She hires Stephanie to work for her business and physically make her product. She rents a building for her business from Ed. She buys computers and machinery from Ellen. She borrows money from Michael's bank in order to get started. She hopes to convince Allen to actually purchase her product.
In the preceding passage, which person can be said to be contributing labor as a factor of production in Sally's business?
Labor is defined as the factor of production that is directly attributable to human effort and work. Labor is distinct from capital, in that capital describes inanimate goods that are essential to production, while labor describes the human element of production. Ed, Ellen, and Michael all contribute to the production of Sally's business, but they do so through the provision of capital. Stephanie contributes her own effort and work as a laborer for Sally. Meanwhile, Allen, as a customer, isn't directly involved in the production process.
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Frictional unemployment occurs when __________.
Frictional unemployment is the name given to a situation whereby people quit because they are dissatisfied with their jobs.
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Someone who works during a strike, rendering the strike impotent, is called a __________.
"Scab" is used, in a demeaning fashion, to describe someone who renders the effects of a strike less effective by continuing to work during the strike or by taking the job of a striking member of a union.
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The Iron Law of Wages states that __________.
The Iron Law of Wages is a famous economic term that originated during the eighteenth or nineteenth Century. It is actually difficult to track who first used the terminology or who first wrote about the idea; historians sometimes credit Malthus, Ricardo, Marx, Engels and so on. The law itself is well-understood: it states that the wage of a laborer will always fall to the very minimum needed to keep the worker working. Because of the massive competition in the labor market, employers have the power to pay their workers as little as possible, because if the worker refuses those terms, someone else will simply take the job. To rephrase: the money paid to a worker will always be the very minimum needed to keep the worker alive and working.
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What name is given to the working class in the writings of Karl Marx?
In The Communist Manifesto, the working class is referred to by the latin term “proletariat.” Marx argued that the “proletariat” were essentially enslaved by the bourgeoise and the upper class who controlled the means of production and thus all the wealth and property.
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Adam Smith is most principally associated with __________
Adam Smith was an Enlightenment-era economic philosopher. He is most remembered for laying down the principle of free-market economics called laissez-faire economics. His theory stated that an economy would have the best success if the government does not intervene. His ideas were widely adopted in Europe and America over the next couple of centuries and were an important foundation of the spread of capitalism around the world.
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The economic theory of mercantilism states that the primary goal of a nation should be _________________.
Mercantilism was an important economic theory in the first era of European colonialism, from roughly 1500 until 1800. With mercantilism, the primary goal of a nation, and a government, should be to regulate trade and the means of production in order to encourage a favorable balance of trade. Essentially, for a nation to succeed according to mercantilist theory, it needs to be exporting more than it is importing. This theory drove many of the actions taken by England and France, along with the other colonial powers, during the age of exploration and the age of colonialism.
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In economic terms a "comparative advantage" is best described as __________
In economic terms "comparative advantage" refers to a situation where one country can produce some goods or resources at a lower cost than another country.
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A business that is founded by several investors collectively, who share a portion of the business and a portion of the profits is called a __________.
A joint stock company is a large scale business whereby shares (or stocks) are owned by numerous individuals, thereby distributing the responsibility for the company, the risk involved for the individual, and the profits that can be made. The development of the joint stock company by the Dutch, Russians, English, and French at various times in the sixteenth and seventeenth centuries was a very important development in economic history, providing much of the means for Europe to gain great material wealth from the age of Colonialism.
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A mutually beneficial relationship between two or more countries, in which they rely on one another for resources, production, or services is generally called __________
"Interdependence" is used to refer to a situation that exists between two or more countries in which they rely on one another for the exchange of raw resources, finished products, goods, and services to the mutual betterment of their respective economies.
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There is only one company from which I can purchase a diamond ring in my community, this company has a(n) __________.
If there is only one company that controls the sale of any particular product they have a "monopoly" on that product.
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In which century did social security emerge in the Western world?
Social Security is a government program whereby people who have very little money or are too infirm, old, or disabled to earn money of their own are provided a certain amount of support by the government. It emerged in the twentieth century, partly as a product of increasing state control over the lives of citizens and partly out of the progressive mentality that was prevailing at the time. The United States has an extensive Social Security system, although significantly less than many European countries.
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For some time there are two companies that sell stuffed turtles on the national market. After a lengthy negotiation, Company A buys out Company B and now has effective control over the entire market. Company A now has __________.
A monopoly occurs when one company controls the means or production of a product and is able to exclusively sell that product on the market. The problem with this system is it allows the company to effectively charge higher prices than might be considered "fair." The alternative to this is competition, which occurs when two or more companies control a share of the market and have to compete with each other to produce better quality products at a lower price.
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