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Econ > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Scarcity

A

Not enough resources for what we would like

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2
Q

Rationing

A

Decide who gets the resources

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3
Q

Three things that come from scarcity

A

Rationing
Competition
Choice

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4
Q

Problems unlimited wants/scarce resources

A

Land
Labour
Capital
Entrepreneurial skills

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5
Q

Land

A

Everything in nature

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6
Q

Labour

A

Physical and mental

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7
Q

Capital

A

Tool for production

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8
Q

Entrepreneurial skills

A

Bring together other resources

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9
Q

Economics

A

The study of scarcity and choice

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10
Q

3 capital

A

Capital good
Consumer good
Investment

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11
Q

Capital good

A

Satisfy indirectly

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12
Q

Consumer good

A

Satisfy directly

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13
Q

Investment

A

Produce capital good

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14
Q

8 guide post

A
  • Opportunity cost
  • Maximize utility
  • incentives matter/property rights matter
  • decisions are made on the margin
  • information is costly
  • secondary effects/what is seen and unseen
  • subjectivity
  • predictive science
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15
Q

Opportunity cost

A

Highest valued alternative

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16
Q

Maximize utility

A

Rational self-interest (maximize happiness)

17
Q

Incentive matter/property rights matter

A

People make decisions based on benefits and costs

18
Q

Diminishing marginal utility

A

Decreasing additional happiness

19
Q

Information is costly

A

Info helps us make better choices but it is costly

20
Q

Secondary effects

A

Unintended consequences

21
Q

Subjectivity

A

Different people value different things differently

22
Q

Predictive science

A

Economics is it a science

23
Q

Capital good

A

Satisfy indirectly

24
Q

Consumer good

A

Satisfy directly

25
Q

Investment

A

Produce capital good

26
Q

8 guide post

A
  • Opportunity cost
  • Maximize utility
  • incentives matter/property rights matter
  • decisions are made on the margin
  • information is costly
  • secondary effects/what is seen and unseen
  • subjectivity
  • predictive science
27
Q

Opportunity cost

A

Highest valued alternative

28
Q

Maximize utility

A

Rational self-interest (maximize happiness)

29
Q

Incentive matter/property rights matter

A

People make decisions based on benefits and costs

30
Q

Diminishing marginal utility

A

Decreasing additional happiness

31
Q

Information is costly

A

Info helps us make better choices but it is costly

32
Q

Secondary effects

A

Unintended consequences

33
Q

Subjectivity

A

Different people value different things differently

34
Q

Predictive science

A

Economics is it a science

Econ (7 decks)

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