Econ-Chapter 3 Flashcards

1
Q

What is true about money?

A

It only makes transactions easier and stores value.

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2
Q

Dollars keep track of what

A

Economic activity

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3
Q

How is value created?

A

Through production and through trade

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4
Q

Production process

A

Turns inputs into consumable outputs

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5
Q

Consumable Outputs

A

Are goods and services

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6
Q

Resources/inputs

A

Natural Resources/ Land
Labor
Capital
Entrepreneurship

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7
Q

To make an iPhone it takes a huge economic engine, connected by the price system that conveys..

A

the necessary information about the scarcity of each resource , the preferences of consumers, and provides incentives for working together.

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8
Q

Technology

A

The way that inputs are combined to produce output

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9
Q

Make Work Fallacy

A

The idea that jobs are valuable, wether or not the labor’s production adds value.

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10
Q

As resources are released from producing one good, they become available to produce others, which makes us..

A

wealthier

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11
Q

Production Possibilities Frontier (PPF) assumes three things:

A

Only two goods are produced over some time period
Some fixed amount of resources is used
A given technology is used

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12
Q

Law of Increasing Opportunity Cost (LIOC)

A

As more of one good is produced, the opportunity cost of producing a unit of that good rises, in terms of theater good which must be sacrificed.

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13
Q

The PPF only shows

A

Possibilities

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14
Q

Wealth is about

A

Having valuable stuff.

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15
Q

Authoritarian Economy

A

Decisions will reflect the values of those taking part in the economy.

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16
Q

Market Economy

A

All choices are based on value

17
Q

Human Capital

A

Individuals upgrade their labor by education and training.

18
Q

Income and Wealth depend on these three things:

A

Quantity of resources
Quality of resources
Freedom to use those resources

19
Q

Those who can provide value..

A

are able to consume some of that value

20
Q

Those who cannot provide as much value have ..

A

Less to consume

21
Q

Invisible hand

A

To promote an end which was no part of his intentions, used by Adam Smith

22
Q

Economic Growth

A

An expansion of an economy’s productive capabilities .