Ch.1 Flashcards
All content of Ch.1
economics
the study of the choices that individuals and societies make in the production, distribution, and consumption of goods
economy
any system for the production, distribution, and consumption of goods and services
economic models
a theory which seeks to show the relationships between various components of an economy
goods
tangible items people want and for which they will pay
service
intangible goods produced by labor and for which people expect to pay
want
the human desire to possess or use a certain good or service
market
a mechanism that allows people to exchange goods
supply
the relationship between a goods price and the amount the producers are willing to suplly
demand
the relationship between a good’s price and the quantity people are willing to by
consumer
an individual who uses goods
producer
a person who works to provide goods
value
the worth that consumers attach to a good
understanding economic helps to
- manage personal and economic affairs based on God’s word
- wisely manage household incomes and have a good standard of living for ourselves and our families
- run a business or maintain a profession
- intelligently save money
- know a government’s functions
- choose economically sensible political leaders
- understand how we are all affected by nationwide and worldwide economic policies
the pilgrims
first economic plan “common course and condition” (communism) then switched to private enterprise. they found they worked harder when it was for themselves rather than other people.
economist
a scholar of the production, distribution, and consumption of goods within economic systems
economic forecast
a prediction, based upon past observations and current trends, of what will happen in an economy in the future
macroeconomics
the study of national and international economies and how these major economies are affected by large-scale choices and public policies
microeconomics
the study of specific components within a major economy and how the choices made by individuals, households, and businesses affect that economy
mass market
a large number of people to whom large quantities of products are sold
all goods
have to be worked for and have limited supply
almost everyone, most everyone
producer, consumer
the story of the prodigal
when you spend more than you can afford you will face consequences
The Vision of Sir Launfal
people spend majority of their time producing and consuming because everything has a price
need
a necessity; something difficult to live without
capital goods
a tool or resource used to produce or distribute goods; a good that is not produced for direct use by end consumers
consumer goods
an item produced for direct use by consumers
modern technology
the industrial skills and scientific methods that can make efficient production possibe
value depends on
a good’s scarcity and utility rather than the amount of labor necessary to create the good
Carl Menger
Lived: 1840-1921
Major publications: The Principles of Economics;
Major contributions: founder of the Austrian School of Economics; Diamond-Water Paradox- why are diamonds for valuable than water which is needed to survive? if water is abundant, the diamond is more valuable bc of its scarcity. if water is scarce then its more valuable bc its more useful.
