Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Principles of Microeconomics > Chapter 1: The Art and Science of Economic Analysis > Flashcards

Chapter 1: The Art and Science of Economic Analysis Flashcards

1
Q

Economics

A

the study of how people use their scarce resources to satisfy their unlimited wants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Resources

A

the inputs, or factors of production, used to produce the goods and services that people want; consists of labor, capital, natural resources, and entrepreneurial ability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Labor

A

the physical and mental effort used to produce goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

capital

A

the buildings, equipment, and human skills used to produce goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Physical capital

A

factories, tools, machines, computers, buildings, airports, highways, and other human creations used to produce goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Human capital

A

consists on knowledge and skill people acquire to increase their productivity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Natural resources

A

all gifts of nature used to produce goods and services; includes renewable and exhaustible resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Renewable resource

A

draw on indefinitely if used conservatively

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Exhaustible resource

A

does not renew itself and so available in limited amounts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Entrepreneurial ability

A

the imagination required to develop a new product or process, the skill needed to organize production, and the willingness to take the risk of profit or loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Entrepreneur

A

a profit seeking decision maker who starts with an idea, organizes an enterprise to bring that idea to life, and assumes the risk of the operation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Wages

A

payment to resource owners for their labor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Interest

A

pavement to the resources owner for the use of their capital

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Rent

A

Payment to resources owners for the use of their natural resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Profit

A

reward for entrepreneurial ability; sales revenue minus resource cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Good

A

a tangible product used to satisfy human wants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Service

A

an activity, or intangible product, used to satisfy human wants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

desire exceeds the amount available at a zero price

A

A good or service is scarce if the amount people _______

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Bads

A

Things we want none of even at zero price

20
Q

Scarcity

A

Occurs when the amount people desire exceeds the amount available at a zero price

21
Q

Air and sea water

A

A few goods seem free because the amount available at a zero price exceed the amount people want, for example:

22
Q

Without scarcity, there would be no economic problem and no need for prices

A

Goods and services that are truly free are not the subject economics.

23
Q

Consumer

A

Demand the goods and services produces

24
Q

Resources owners

A

Supply resources to firms, government, and the rest of the world

25
Q

Markets

A

a set of arrangements by which buyers and sellers carry out exchange at mutually agreeable terms

26
Q

Product market

A

a market in which a good or service is bought and sold

27
Q

Resource market

A

a market in which a resources are bought and sold

28
Q

circular-flow model

A

a diagram that traces the flow of resources, products, income, and revenue among economic decision makers

29
Q

Rational self-interest

A

each individual tries to maximize the expected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit

30
Q

Self-interest

A

does not rule out concern for others, but it means that concern is influenced by the same economic forces that affect other economic choices

31
Q

Marginal

A

incremental, additional, or extra; used to describe a change in an economic variable

32
Q

exceeds the expected marginal cost

A

A rational decision maker changes the status quo if the expected marginal benefit from the change

33
Q

Microeconomics

A

the study of the economic behavior in particular markets, such as that for computers or unskilled labor

  • Individual economic choices
  • Markets coordinate the choices of economic decision makers
  • Individual pieces of the puzzle
34
Q

Macroeconomics

A

the study of the economic behavior of entire economies, as measured, for example, by total production and employment
-Performance of the economy as a whole

35
Q

Recession

A

decline in economic activity as reflected by a decline in production, employment, or other aggregate measures

36
Q

Economic fluctuations

A

the rise and fall of economic activity relative to the lantern growth trend of the economy, also called business cycles

37
Q

Economic theory/economic model

A

a simplification of reality used to make predictions about cause and effect in the real world

38
Q

The Scientific Method

A

Identify the question and define relevant variables
Specify assumptions
Formulate a hypothesis
Test the hypothesis

39
Q

Variable

A

a measure, such as price or quantity that can take on different value is at different times

40
Q

Other-things-constant assumption

A

the assumption, when focusing on thee relation among key economic variables, that other variables remain unchanged, ceteris paribus

41
Q

Behavioral assumptions

A

an assumption that describes the expected behavior of economic decision makers-what motivates them

42
Q

Positive economic statement

A

a statement that can be proved or disproved by reference to facts

43
Q

Normative economic statement

A

a statement that reflects an opinion which cannot be proved or disproved by reference to the facts

44
Q

offset one another so the average behavior of a large group can be predicted more accurately than the behavior of a particular individual

A

The random actions of individuals tend to

45
Q

Association-is-causation fallacy

A

the incorrect idea that if two variables are associated in time, one must necessarily cause the other

46
Q

Fallacy of composition

A

the incorrect belief that what is true for the individual, or part, must necessarily be true for the group, or the whole

47
Q

Secondary effects

A

unintended consequences of economic actions that may develop slowly over time as people react to events

Principles of Microeconomics (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions