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Microeconomics > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

10 Key Concepts to retain for life (The Individual (4) )

A

Facing Trade Offs, Opportunity Costs, Choosing little more/less, Influence of Incentives

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2
Q

10 Key Concepts to retain for life (Interaction among individuals (3) )

A

Specialization and Trade, Role of Governments, Effectiveness of Markets

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3
Q

10 Key Concepts to retain for life (Economy as a whole (3) )

A

Production and standard of living, money and inflation, Inflation-Unemployment trade off

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4
Q

Facing Trade Offs

A

Products are scare, you must make trade offs and choices

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5
Q

Opportunity Cost

A

cost of the choice you make is what you give it up for

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6
Q

Choosing a little more/less

A

Choices made at margin do I buy more or less

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7
Q

Influence of incentives

A

choices influenced by motives and encouragements

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8
Q

Specialization and trade

A

trade usually will improve well being of participants

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9
Q

effectiveness of markets

A

coordinates trade among individuals groups and nations

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10
Q

Role of Governments

A

occasionally improve the coordinating function of markets

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11
Q

production and standard of living

A

standard living of a person in country is dependent on its production of goods and services

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12
Q

Money and Inflation

A

more money printed means growth of output of goods and services, this can lead to inflation

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13
Q

unemployment trade off

A

in short run society faces a short run trade off between inflation and its level of unemployment

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14
Q

Economic problem

A

wants greater then resources needed to make those desires

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15
Q

scarcity

A

resources limited so restricts options and requires choices

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16
Q

human utility

A

pleasure happiness satisfaction obtained from consuming good or service

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17
Q

no free lunch?

A

choices always come with a cost

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18
Q

purposeful behaviour

A

individuals are rational humans want to make optimal choices but emotions ruin it

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19
Q

Marginal Analysis

A

Comparing Benefits and Cost

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20
Q

Economic Principle

A

Widely accepted economic theory about economic behaviour

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21
Q

Economic Theories contain (4)

A

purposeful simplification, generalization, other things equal, graphical expression

22
Q

purposeful simplification

A

full economic reality itself is too complex simplify is better analysis

23
Q

generalization

A

principles are generalized relating to groups, facts, data. observations to identify a part of the whole as the whole

24
Q

other things equal

A

only 1 variable changes, all other factors remain constant

25
Q

microeconomic

A

concerned with decision making by individual customer, workers, household, firms ex price of product, income,

26
Q

macroeconomics and what does it focus on

A

examines performance and behaviour of economy as a whole, focus on economic growth, business cycle, interest rate, aggregates

27
Q

aggregate

A

collection of specific economic units treated as one unit

28
Q

positive economic statement

A

the facts, WHAT IS actually happening, numbers

29
Q

normative economic statement

A

subjecting, describes what economy SHOULD be like

30
Q

economic problem

A

need to make choices, wants unlimited while resources and means limited. Choices have trade off and have oppt cost

31
Q

Budget Line Contrast (5)

A

point on graph=consumption bundle, fractions allowed, attainable and efficient=on line, attainable and inefficient=inside line, unattainable=outside line

32
Q

Is oppt cost constant on budget line

A

yes

33
Q

Factors of production/inputs

A

all natural, human, and manufactured, resources, that go into production of goods and services

34
Q

Land

A

gifts of nature, natural resource

35
Q

labour

A

physical actions and mental activities that people contribute to the production of g/s

36
Q

capital

A

manufacturing aids used in production of goods ex machines tools

37
Q

Entrepreneurial ability 1. is it apart of labour 2. What are the roles of it (5)

A
  1. No

2. make routine pricing decisions, innovate, create market demand, take risk and make decisions

38
Q

Assumptions of Production Possibility Curve (4)

A

Full employment, Fixed resources, fixed technology, two goods

39
Q

full employment

A

economy is employing all its available resources

40
Q

fixed resources

A

quantity and quality of the factors of production are fixed

41
Q

fixed technology

A

methods used to produce output is constant

42
Q

consumer goods

A

products that satisfy wants

43
Q

capital goods

A

products we produce

44
Q

law of increasing opportunity costs (3)

A

shape is concave, resources not completely adaptable to alternate uses. the more we make the more each additional costs

45
Q

marginal benefit

A

satisfaction or utility a consumer receives when additional good or service is purchased

46
Q

marginal cost

A

change in total cost to produce additional good or service

47
Q

MB>MC
MB=MC
MB < MC

A

Produce more
remain same
scale back

48
Q

Pointes under PPF Curve

A

unemployment and productive inefficient

49
Q

unemployment and productive inefficiency

A

economy not operating at full potential, using all available resources, or producing optimal amount

50
Q

ways to grow economy and shift production possibilities curve

A

increase factor supply, and quantity, advance technology.

51
Q

STUDY GRAPHS

A

budget line, PPF, oppt cost, economic growth, MB/MC

Microeconomics (8 decks)

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