1st Flashcards
Scarcity
More demand for service than availability. 2 cookies 1 person
Economics
Social science studies how ppl distribute limited resources to satisfy unlimited wants
Concerned how ppl respond to economic problem of scarcity
Resources
Land
Labour
Physical capital
Human capital
Entrepreneurship
Macroeconomics
Big picture
-inflation
-national income/GDP
-unemployment
Rationality assumption
Assumption that person makes decisions based on maximizing their self interest
Ceteris partbus assumption
Nothing changes except factors being studied
Opportunity cost
What you lose out on when you chose to do something else
Margin benefit
Extra benefits one receives
Margin cost
Extra costs or sacrifices
Production possibility frontier PPF
Blueprint showing what a country can produce w its resources
Absolute advantage
Perform task w least hours possible
Comparative advantage
Ability to produce a good/service at lower opportunity cost
Economic systems
Social arrangements through which resources are used to satisfy human wants
Pure command economy
Public ownership of all property resources
Social planner
Pure capitalist economy
Private ownership of all property resources