Basic Economic Concepts Flashcards
It is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices on allocating resources to satisfy their wants and needs, trying to determine how these groups should organize and coordinate efforts to achieve maximum output.
Economics
He was Father of Modern Economics.
Adam Smith
It refers to the idea of limited resources
Scarcity
It is an exchange where you gave up one thing for another.
Trade-off
It is where the most desirable alternative given up when you make a choice.
Opportunity Cost
It refers to the Land, Labor, and Capital.
Factors of Production
It is a social science that analyzes the most efficient way to use our scarce resources.
Economics
He is also known for creating the concept of gross domestic product (GDP) and for his theory of compensating wage differentials.
Adam Smith
What is the first book that Adam Smith, where he proposed the idea of an invisible hand- the tendency of free markets to regulate themselves by means of competition, supply and demand, and self interest?
The Theory of Moral Sentiments
It is always when a business buys machines and tools, they are buying to improve their business.
Investment
It talks about the machines, tools, and equipment a business buy for the production of goods.
Capital
These are goods created for direct consumption. (e.g. Pizza)
Consumer Good
It is created for indirect consumption. (e.g. oven, blenders, knives, etc.). These goods are used to make consumer goods.
Capital Goods
It refers to any skills or knowledge gained by a worker through education and experience. And these can be improved overtime.
Human Capital
Land, Labor, and Capital. In the production of a good, these factors of production go with it.
Factors of Production
