Chapter 1 Flashcards
How do information streams influence decision-making?
Alters choices, spending, entertainment, and purchases
What is the primary focus of economics?
Human decision making
What is the main reason discussed for scarcity?
Understanding economics
Who introduced the idea of dividing labor into discrete tasks?
Adam Smith
What is the impact of the division of labor?
Increases production
What does microeconomics focus on?
Individual agents’ actions
What determines a nation’s production of goods and services?
Macroeconomic health
How do economists approach economic issues?
Apply theories to fit the issue
What characterizes a command economy?
Economic effort for goals set by rulers
What matters do laws govern in a market-oriented economy?
Private property, violence, contracts
What factor has encouraged greater trade internationally?
Agreements and treaties
What concerns have led to pushback against globalization?
Jobs, sovereignty, inequality
What does scarcity mean?
Wants exceed availability
Who proposed the division and specialization of labor?
Adam Smith
What do microeconomics and macroeconomics study?
The same economy
What determines job availability in an economy?
Macroeconomic health
What does the economic system include?
Goods, services, buying, selling, employment
What is useful about rough economic freedom measures?
Discerning trends
What is a measure of globalization?
Exports
What does economics study?
Choices under scarcity
How do Americans use information streams?
Read reviews, check ratings
What is the ultimate scarce resource?
Time
In which book did Adam Smith discuss division of labor?
The Wealth of Nations
Why is specialization effective?
More effective production
What has the culture of learning in governments led to?
Improvement in lives of poor
What determines household spending?
Budgets and needs/wants
What determines a nation?s standard of living?
Macroeconomic health
Which countries currently have command economies?
Cuba and North Korea
What was the overall trend in economic freedom in recent decades?
Higher level of economic freedom
What are exports?
Goods and services sold abroad
What is the goods and services market?
Firms sell, households buy
What is a factor that affects economic outcomes?
Information dissemination speed
Why is scarcity a problem?
Limited resources and infinite human wants
What is a business’s core competency?
Focus on few products
What are the goals for determining macroeconomic health?
Growth, low unemployment, low inflation
Key difference between command and market economies?
Centralized vs. decentralized structure.
What does the export to GDP ratio measure?
Economic production sold abroad
How do farmers decide to plant and harvest today?
Driven by data
What is the purpose of FRED data in economics?
Describes economic issues and problems
What is the result of larger organizations and specialization?
Increased production and consumption
Who is considered one of the greatest economists of the twentieth century?
John Maynard Keynes
What is a key feature of a market economy?
Decentralized decision-making
Why is the U.S. export share lower than the global average?
More division of labor domestically
What can maximizing production efficiently influence?
Farm profitability
What does macroeconomics focus on?
Broad economy issues
What is FRED?
Federal Reserve Bank database
What has been a force against the problem of scarcity?
Division and specialization of labor
Who owns the means of production in a market economy?
Private individuals
What is scarcity?
Wants exceed supply
What does scarcity lead to?
The Problem of Scarcity
What does specialization require?
Trade
What is economics seeking to solve?
Scarcity
What does economics analyze?
Scarcity
How has modern society evolved into a strong economy?
Through specialization
What does a modern economy display?
Division of labor
What types of resources are needed to produce goods and services?
Labor, tools, land, raw materials
What does economics acknowledge about production?
Environmental pollution issues
What does economics explore regarding education?
Developing workers’ skills
What causes the economy to speed up or slow down?
Macroeconomic factors
What is a theory in economics?
Simplified representation of interactions
How do economists express theories?
Diagrams, graphs, math equations
Provide an example of a command economy.
Ancient Egypt
What do some experts say about the index’s category choices?
Politically biased
What do indices like the Heritage Foundation?s Index of Economic Freedom provide?
Resource for discussion
