Chapter 3 Flashcards
The study of how individuals and society choose to use scarce resources to produce goods and services and distribute them for consumption.
Economics
Refers to what you give up (your next best choice) in order to do or get something else (your chosen decision).
Opportunity Cost
A shortage of resourced created by limitation of quantity or cost.
Scarcity
Land, Labor, Capital (money), entrepreneurship, knowledge, time.
Resources
The study of the operation of a nation’s economy as a whole. Monetary policy, fiscal policy, unemployment, interest rates, and inflation.
Macroeconomics
Father of Modern Economics
Adam Smith
Wealth of the Nations 1776 is about?
Resources don’t have to be divided, simply create more resources. Still relevant today.
What is known as as a individual trying to improve their own situation in life, and their efforts serve.
Invisible Hand Theory
Consumers making decisions with their money determine the success or failure of a business.
Economic Man Model
The quantity of products that producers are willing to sell at different prices at a specific time.
Supply
As the price goes up, the quantity of that produced goes up.
Law of Supply
Law of Supply is what type of relationship?
Direct Relationship
The quantity of products that consumers are willing and able to buy at different prices at a specific time.
Demand
As the price goes up, the quantity that consumers are willing to buy goes down.
Law of Demand
Law of Demand is what type of relationship?
Inverse Relationship
The point at which the amount of goods sought by buyers is equal to the amount of goods produced by suppliers.
Equilibrium Point
A common, recurring pattern in which there is a period of rapid economic growth when supply and demand stimulate each other; alternating with a period of decline/recession with diminishing demand and supply.
Business Cycle
A economic system in which all of most of the factors of production and distribution are privately owned and operated for profit.
Capitalism
A system in which decisions about what to produce and in what quantities are made by the market.
Free Market
A market condition in which a large number of businesses produce product that are very similar but are perceived by the buyer as different.
Monopolistic Competition
An attempt to make buyers think similar products are different in some way.
Product Differentiation.
A form of competition in which just a few businesses dominate a market.
Oligopoly
A form of competition in which only one business controls the total supply of a product and its price.
Monopoly
The removal of government control and strict oversight in the market that thereby opens the market for others to enter.
Deregulation
