Chapter 1- Introducing Economics Flashcards
Economics:
The study of the production, distribution & consumption of goods and services by society.
A Need:
Something that can be done without, e.g. food, shelter
- are finite
A Want:
Anything else we wish to consume after our needs have been satisfied, e.g. holidays
- are unlimited
Opportunity Cost:
The alternatives that must be done without in order to have that item, e.g……
Private Cost:
The cost paid by the person using a good or service, e.g. 80,000 people at concert
Social Cost:
The cost paid by the rest of society whether they want to or not, e.g. litter coped by residents
Wealth:
A stock of assets already accumulated, e.g. houses
Income:
The amount of wealth produces by a person or community over a period of time, normally a year, e.g. money made from rent of houses
Welfare:
The overall well-being of a person.
Incl. happiness, health, etc.
Positive Statements:
Statements of facts supported by evidence.
Normative Statements:
Expressions of opinion.
Macroeconomics:
Studies the decision-making process of gov. on topics such as income, employment, inflation, international trade, etc.
Microeconomics:
Studies the decision-making process of individual units in the economy, at the level of the individual consumer, supplier and producer.
Free Enterprise Economy:
Is characterised by very little, if any, gov. intervention, e.g. USA
Centrally Planned Economy:
Is characterised by the public ownership of the factors of production, e.g. Cuba
