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Basic Microeconomics > Chapter 2: Basic Economic Problems, Economic Systems, Economic Models (Circular Flow Model and Product Possibility Frontier) > Flashcards

Chapter 2: Basic Economic Problems, Economic Systems, Economic Models (Circular Flow Model and Product Possibility Frontier) Flashcards

1
Q

a common difficulty that an economy faces

A

The allocation of resources

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2
Q

This problem is about making judgments about which commodities to produce and in what quantities they should be produced.

A

What to produce?

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3
Q

this issue concerns the techniques that must be adopted and used in the creation of goods and services and the production of goods and services.

A

How to produce?

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4
Q

What resources are short in supply?

A

Land, labor, machines, capital equipment, tools, and natural resources

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5
Q

mechanization and mass production, Creation of goods

A

Capital Intensive

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6
Q

services are generated using blank processes due to the high degree of client engagement.

A

Labor-intensive

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7
Q

one of the most pressing economic issues is determining which goods should be produced for which segments of society.

A

For whom to produce?

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8
Q

Blank are in demand from all segments of society

A

Essential goods and services

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9
Q

Blank are only desired by a select few

A

luxury goods and services

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10
Q

Economic selections of goods and services are based on

A

popular interest and preferences

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11
Q

the central concern of an economy also includes Blank and Blank

A

efficient resource utilization and resource development

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12
Q

it is described what is used in production process to create output or finished goods or services.

A

Factors of Production

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13
Q

the quantity of the output is determined by the amount of various of inputs that are used.

A

Production function

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14
Q

Adam Smith, David Ricardo and Karl Marx, classified Blank, blank, and blank as components of production.

A

land, labor and capital

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15
Q

the two most important inputs for processes and earnings today.

A

Capital and Labor

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16
Q

Source of all materials and food whether in liquid, solid, gaseous form, in or above the earth.

A

Land

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17
Q

Examples of Land as a factor of production

A

Agricultural land to commercial real estate
or
From a specific piece of land oil and gold

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18
Q

Farmers boost the blank and blank of land by cultivating crops on it.

A

value and utility

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19
Q

Land was responsible for providing blank for a group of early French economists known as the blank, who predates the classical political economists.

A

economic value

Physiocrats

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20
Q

The most important component of any real estate venture

A

Land

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21
Q

Available physical and mental talents of the people who have to produce goods and services

A

Labor

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22
Q

The work put in by an individual to bring a product or service to market.

A

Labor

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23
Q

It is a term used in the software industry to describe the effort done by project managers and developers to create the final product, even an artist engaged in the creation of art.

A

Labor

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24
Q

Workers in the production line are compensated for their blank and blank with pay that are determined by their blank and blank.

A

time and effort

skill and training

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25
Q

Labor performed by an unskilled and untrained individual is usually blank at a blank.

A

compensated at a low rate

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26
Q

Refers to skilled and trained personnel who are paid more because they bring more to the task than their physical capacity.

A

Human capital

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27
Q

Tangible physical good that a person or society creates in the expectation that its use will improve or increase future production

A

Capital

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28
Q

Capital is a blank for modern mainstream neoclassical economist

A

a major driver of value

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29
Q

Refers to the purchase of commodities manufactured with money in manufacturing as an element of production.

A

Capital

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30
Q

Examples of Capital according to the Discussion

A

Tractor, office desks, and chairs

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31
Q

Money is not a blank but a resource because it is not used directly in the creation of a good or service.

A

factor of production

a resource

32
Q

it helps production processes by allowing entrepreneurs and business owners to purchase capital goods or land as well as pay workers.

A

Money

33
Q

People are combing the other three factors of production to create some products or services to sell

A

Entrepreneurship

34
Q

Countries are building the blank and blank to make it simpler for entrepreneurs to start businesses since entrepreneurs are critical for blank.

A

required framework and policies

economic growth

35
Q

Some production parameters may be blank than others depending on the situation.

A

more significant

36
Q

Significant production parameters for a software corporation

A

Labor

37
Q

Significant production parameters for a corporation that creates and rents out office space

A

Land and Capital

38
Q

It is made up of a variety of organizations, agencies, companies, decision-making processes, and consumption patterns that make up a community economic structure around the world

A

Economic System

39
Q

What are regulated by economic systems?

A

factors of production such as land, capital, labor, and physical resources

40
Q

A type of economic System that economic decisions are made with great influence from the past.

A

Traditional Economy

41
Q

In a traditional economy, the exchange of goods, services and labor, all of which follow well-established patterns, is heavily reliant on individuals with little blank or blank.

A

division of Labor or specialization

42
Q

the most fundamental and oldest of the four types of economic system

A

Traditional Economy

43
Q

Most widespread in rural areas of second and third world countries where blank and blank are the mainstays of the economy

A

farming and other traditional income-generating industries

44
Q

An economic system that is affected by traditions and ideas and focuses on the fundamentals of products, services, and work.

A

Traditional Economy

45
Q

Traditional economy has characteristics such as ownership of blank, the leader makes decisions about blank, which is the blank of the economy, blank govern the production, distribution, and use of economic resources, not receptive to blank, the economy is only its blank with culture and religion taking precedence, and blank are utilized to collect blank for manufacturing.

A 
communal land
Agricultural production
Foundation
customary customs
new technologies
third priority
minds 
raw materials
46
Q

An economic system that factors of production are owned and managed by the state. Decisions in answering the basic economic problems are planned, done, and dictated by the government.

A

Command Economy

47
Q

Also known as Planned Economy

A

Command Economy

48
Q

An economic system that has is a powerful centralized authority, usually the government in charge of a large section of the economy

A

Command Economy

49
Q

If a country’s economy has a blank, it’s likely that it’ll lean toward a command economy.

A

lot of resources

command economy

50
Q

In a command economy, centralized control is ideal for valuable resources like blank or blank. Other less essential areas of the economy such as blank, are blank.

A

gold or oil

agriculture, are regulated by the people

51
Q

An economic system that individual consumers and businesses interact to solve the economic problem.

A

Market Economy

52
Q

Also known as Free Market Economy

A

Market Economy

53
Q

In a Market Economy, the blank has little control over resources and avoids interfering with vital economic sectors. Rather, people in the blank are the sources of regulation.

A

government

supply-demand connection

54
Q

An economic system that is influenced by demand and supply forces

A

Market Economy

55
Q

An economic system that combines two economic systems

A

Mixed Economy

56
Q

Also known as Dual Systems

A

Mixed Economy

57
Q

A mixed economy is a blank that is blank

A

A market system

heavily regulated

58
Q

shows the basic economic relationships within a market economy

A

Circular Flow Model

59
Q

The Circular Flow Model exemplifies the balance that exists in our economy between blank and blank.

A

injections and leakages

60
Q

The Circular Flow Model shows the blank, blank, and blank.

A

households, corporations, and governments

61
Q

We also have the banking system which enables blank and as we’ll see in a moment, aids in the productive conversion of blank into blank to develop the economy.

A

money exchange
savings
investment

62
Q

used to buy products and services in the economy circular cycle.

A

Money

63
Q

In the economy, blank and blank flow in one direction, while black flows in the opposite direction.

A

goods and services

money

64
Q

What are the prices that correspond to land, labor, capital, and entrepreneurship as production elements?

A

Rent, labor, and profit

65
Q

Households blank from businesses and blank in exchange for money

A

purchase goods and services

sell their labor, land, and capital

66
Q

Businesses generate money in profits by blank and blank to households and pay blank to households in exchange for the use of factors of production.

A

selling goods and services

wages, interest, and profits

67
Q

levied on individuals and corporations by governments in order to offer certain benefits to everyone

A

Taxes

68
Q

Main players of the economy

A

individuals and businesses

69
Q

The circular flow model’s main goal

A

to figure out how money circulates in a given economy

70
Q

circular flow paradigm begins with the blank which spends money and ends with the blank, which creates goods

A

consumer sector

producer sector

71
Q

a curve and business analysis that depicts the variations in the amounts that can be produced of two products if they both rely on the same finite resource.

A

Production Possibility Frontier

72
Q

Production Possibility Frontier can be used to demonstrate that the country’s economy operates at its blank level when it produces only what it is blank to create and trades for the blank of what it requires.

A

most efficient
best qualified
remainder

73
Q

Production Possibility Frontier is also known as?

A

production possibility curve

74
Q

It is shown visually as an arc with one commodity on the X-axis and the other on the Y-axis

A

production possibility curve
or
Production Possibility Frontier

75
Q

Points within the curve are considered blank, whereas points outside the curve are blank that cannot be achieved with their current resources.

A

inefficient resource utilization

goals of the economy

76
Q

The most efficient number of the two commodities that can be produced with given resources is shown?

A

along the curve

77
Q

Moving upward or downward along the curve would require the economy to blank of one of the commodities and blank the other.

A

reduce the production

increase

Basic Microeconomics (8 decks)

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