Chapter 1 Flashcards
The study of how humans make decisions in the face of scarcity is known as
Economics
Economics acknowledges
that the production of useful goods and services can create problems of environmental pollution
Economics looks at how
government spending, taxes and regulations affect decisions about production and consumption
Economics recognizes that
every decision involves trade-offs
when the human wants for goods, services, and resources exceed what is available is known as
Scarcity
the ultimate scarce resource is
time
An economy that is self-sufficient, has little economic growth, where what you produce is what you consume, and organizes economic affairs through tradition is called a? List some examples.
Traditional Economy ex.Asia, Africa, and South America
An economy that operates off more govt control, govt owns resources, little private property, health care is provided by govt , and the govt decides what goods and services will be produced and what prices to charge them for is called a ? List some examples
Command Economy ex. Cuba and North Korea
An economy where people have more control, have few regulations, little govt control, private property, high inequality, and brings together buyers and sellers of goods and services is called a ? List some examples
Market Economy ex. United States
An economy that includes elements of both command and market economy is called a ? List some examples.
Mixed Economy ex.Europe and Latin America
most countries around the world are what type of economy
Mixed
Data is very important in economics because it…
describes and measures the issues and problems that economies seek to understand
Black markets are? What type of economies tend to have black markets
are underground economies where buyers and sellers make transactions without govt approval, they are most often in heavy regulated economies
an increase in the international exchanges in goods and services, capital and labor expanding political and economic connections between people all around the world is known as…
Globalization
Exports are..
goods and services that one produces domestically and sells abroad
Imports are…
goods and services that one produces abroad and then sells domestically
A theory is a..
simple representation of how 2 variables interact with each other
The purpose of a theory is to
take a complex real world issue and simplify it
a good theory is ______ enough to understand, while _______ enough to capture key features of the situation
simple; complex
What do economists use to test theories?
models
Factory workers dividing tasks to produce a good or service, instead of all the tasks being done by the same person is known as..
Division of Labour
Specialization is when…
Workers focus on creating simpler tasks within a complex process
What is the opposite of specialization?
Self-sufficiency
Specialization allows for?
an individual to learn their tasks better, for companies to save and invest more money with machinery, for an increase in overall production, for the specialized workers who know their job well enough to suggest innovative ways to do their work better, allows businesses to take advantage of economies of scale
“as the level of production increases, the cost of producing each individual unit declines” is what
Economies of Scale
what 2 things are a force against scarcity?
division and specialization of labour
Microeconomics focuses on
the actions and behavior of individuals or companies when their actions concern a group of people such as low income families, workers, households, business, etc.
Microeconomics and Macroeconomics are not separate subjects but rather
complementary
The mircodecisions of individual businesses are influenced by
whether the macroeconomy is healthy
Small economies should take advantage of the
international trade in specialization
who was the individual who believed economics teaches you how to think, not what to think, and believed in an active role in govt during times of recession
John Keynes
Which individual introduced the concept of division of labour, and is the father of economics
Adam Smith
