Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

ECON 104 > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

production

A

any activity that results in the conversion of resources into products that can be used in consumption
input -> output goods

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

resources or factors of production

A

inputs
land, labor, physical capital, human capital

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

land

A

natural recourses

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

labor

A

people, workers, employees

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

physical capital

A

all manufactured resources
machines, buildings, mechanical equipment

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

human capital

A

training, skills, education

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

entrepreneurship

A

person who organizes, manages, and assembles the other resources, virtually no new business could get started or operate without entrepreneurs
-risk taskers as they can lose a lot
- maker of basic business decisions

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

economic system

A

a scoiety’s institutional mechanism for determining the way in which scare resources are used to satisfy human wants
-each country must figure out how to deal with scarcity and allocation issues

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

3 questions each economy must answer

A
  1. what goods and services will be produced
    -what do people want?
    -consider opportunity costs
  2. how will goods and services be produced
    -labor? machines?
  3. who will receive the goods and services produced
    -government or market distribution
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

market economy

A

market forces (supply & demand) answer 3 questions
very decentralized
institutions created by the state protect private property & enforce contracts

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

adam smith’s “invisible hand”

A

when everyone does what’s in their own best interest, the economy thrives

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

centrally planned economy

A

central government makes all output, pricing, and allocation decisions

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

why does centrally planned economy fail

A

individuals likely don’t have proper incentives to work hard, innovate, or maintain resources
government isn’t very good (compared to markets) or determining needs of individuals

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

mixed economy

A

most economic decisions may result from the interaction of buyers and sellers in markets but the government plays a role in the allocation of certain resources
-all economies are mixed to some degree
-depends on the extent of government role

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

3 questions create what 3 sub questions

A

who owns the factors of production (inputs)?
can individuals own private property?
how involved is the government in the production and distribution process?

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

these sub questions ultimately

A

determine the incentives that people face

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

incentives affect

A

individual decision making

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

the actions of individuals will

A

aggregate & affect overall economic growth, income, and well being

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

the wrong incentives will

A

slow or stop government growth & innovation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

communism

A

most or all property and resources are collectively owned and distributed by the government. idea in which all people are equal and there is no need for money or the accumulation of individual wealth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

3 points of communism

A
  1. no private ownership of economic resources
  2. central government controls all facets of production
  3. economic output is owned and distributed by government
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

central government provides people with all living necessities from benefits of

A

collective labor (depends on constant advances in technology to provide increased production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

problem with “from each according to his ability, to each according to his needs”

A

the government
- expects you to contribute as much as they ask
-determine your “needs”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

communism ideology birthed because of french revolution because Karl Marx believed

A

all of history was based in class struggles

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
in a capitalist society, Marx saw a "ruling class" that
owned the means of production
26
the "working class" either were the means of production, or
enabled other means of production, such as operating machinery
27
Marx believed resentment would arise under capitalism
he actively advocated for such working class revolts
28
communism philosophy
from each according to his ability, to each according to his needs
29
communism economy planned by
central government
30
communism ownership of economic resources
all resources are publicly owned and controlled by the government
31
communism distribution of economic production
production will meet all basic human needs and is distributed to the people at no change
32
communism class distinction
class is abolished
33
communist states
north korea, cuba, former soviet union
34
why is china not pure communism?
1. economy not communist anymore (state is partially communist on paper) 2. series of market-oriented economic reforms starting in 1978 after death of Mao Zedong -decollectivization -permission for entrepreneurs to start business -privatization of many state-owned industries -special economic zones
35
Marxism
is a political and economic philosophy
36
one necessary facet to the transformation towards a communist society is
abolishment of inheritance
37
why is it bad to be equal with communism
we will all be equally poor
38
main economic problems with communism
1. strong incentive to free ride 2. economy will stall out
39
communism today
1. rise in the "oppressed vs oppressor" ideology 2. many people today more concerned with equity of results rather than equity of opportunity
40
china communism
agricultural output from 1970s was less than output in 1949
41
chinese farmers 1978
wanted to grow food for themselves rather than being dependent on government result: increase in per capita income
42
why did things change after farmers asked to grow food?
they had incentives to produce all because they changed economic rules
43
with government having control over everything
extreme corruption human rights violations leaders are rich citizens are poor, fearful, powerless
44
example of affects of communism
north vs south korea
45
USSR communism 1950-1980
large investments in physical capital (factories) resulted in increases in capital per hour worked and GDP per hour worked
46
why lack of technological advances in USSR?
no incentives to work or innovate in a way that supports long run growth collapsed in 1991
47
life for a typical person in USSR
long lines, shortages, and unhappy people
48
socialism
an economic system under which each person- though a democratically elected government- is given an equal share of economic inputs: labor, land, entrepreneurship, capital goods, and natural resources
49
pure socialism assumes that people
naturally want to cooperate, but are restrained from doing so by competition inside of capitalism
50
like a command economy, the socialist government employs
centralized planning to allocate resources based on both the needs of individuals and society as a whole
51
socialism phrase
"from each according to his ability, to each according to his contribution
52
problem similar to that of communism:
government determines ability and contribution and wrong incentives lead to slow or no growth
53
communism and socialism both formed out of
perceived exploitation of workers by wealthy business during revolution ex. french revolution, industrial revolution
54
communism and socialism both assume that goods and services will be produced and distributed by
government- controlled institutions or collective organizations
55
central government is responsible for
all aspects of economic planning, including matters of supply and demand
56
socialism is based on the premise the people will compensated based in
their level of individual contribution to the economy -possible for effort and innovation to be rewarded under socialism - but still massive government control
57
socialism ownership
individuals can own private property
58
socialism class distinction
classes exist but difference are diminished. it is possible for some people to earn more than others
59
socialism countries
algeria, bangladesh, eritrea, guinea-bissau, guyana, nepal, nicaragua, portugal, sri lanka, tanzania, western sahara
60
countries with policies could be described as more social
france, germany, norway, denmark, finland, sweden
61
all goods in the european countries are still distributed by
free markets with a captistlic approach
62
you could loosely defined some of them as leaning more toward a
social democracy
63
democratic socialism
an economic, social, and political ideology holding that while both the society and economy should be run democratically, they should be dedicated to meeting - the needs of the people as a whole (rather than encouraging individual prosperity)
64
Goal of democratic socialism
eventually have universally-used services distributed by government (housing, utilities, mass transit, health care) consumer goods are distributed by a capitalistic free market
65
the second half of the 20th century saw the birth of a more moderate version of socialist democracy, calling for
mixture of socialist and capitalist control of all means of economic production extensities social welfare programs to help provide basic needs of the people
66
how are social welfare programs funded
various taxes
67
notable about scandinavian taxes
top taxes rates in scandinavia hit middle class people, not just the rich
68
VAT
valued-added tax added to each good through different production stages
69
why is a VAT regressive
lower income people send a higher percentage of their income on this tax than higher-income people

ECON 104 (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions