ECON LESSON 1 Flashcards
anything that gives a person utility
Good
the satisfaction one receives from a good.
Utility
something that gives a person disutility
Bad
the dissatisfaction one receives from a bad.
Disutility
this is needed to produce goods, sometimes referred to as
inputs or factor of production
Resource
General Categories of Resources:
Land
labor
capital
Entrepreneurship
includes natural resources
Land
physical and mental talents contributed by people
Labor
produced goods that can be used as further input
Capital
the talent that some people have for organizing
the resources of land, labor, and capital for production
Entrepreneurship
condition in which our wants (for goods) are greater than
the limited resources available to satisfy those who want
Scarcity
Our wants are finite, but our resources are infinite TRUE OR FALSE
FALSE
If scarcity didn’t exist, neither would economics.TRUE OR FALSE
TRUE
the science of how individuals and societies deal with
the fact that wants are greater than the limited resources available to
satisfy those wants
Economics
The science of scarcity
Economics
A country may be rich or poor not because of the level of available resources, but how it deals with the infinite scarcity. TRUE OR FALSE
TRUE
One country does function under the same economic and political systems
compared to others.TRUE OR FALSE
FALSE
a means of deciding who gets what of available
resources and goods (example, putting a price on goods/resources).
rationing device
If resources were not enough, people
would not have to compete for limited available resources. TRUE OR FALSE
FALSE
The most highly valued opportunity or alternative forfeited when we
make a choice is known as
Opportunity Cost
a change in opportunity cost can change a
person’s behavior. TRUE OR FALSE
TRUE
The lower the opportunity cost of doing something, the less likely it
will be done. TRUE OR FALSE
FALSE
additional benefits; the benefits connected with
consuming an additional unit of a good or undertaking one more unit
of an activity
Marginal Benefits
additional costs; the costs connected with
consuming an additional unit of a good or undertaking one more unit
of an activity.
Marginal Costs
the condition when marginal benefits equal marginal
costs. The right amount of anything is the efficient amount.
Efficiency
something that encourages or motivates a person to
undertake an action
incentive
is the giving up of one thing for something else.
Exchange, or trade
This deals with cause-effect relationships that can be tested
Positive economics
This deals with value judgements and opinions that cannot be tested
Normative economics
is the branch of economics that deals with human
behavior and choices as they relate to relatively small units. (it deals with behavior of an individual, a firm, an industry, or a single market)
Microeconomics
is the branch of economics that deals with human
behavior and choices as they relate to the entire economy (inflation, unemployment rate, changes interest rates,
government spending, and taxes)
Macroeconomics
A Latin term meaning “all other things constant” or “nothing else
changes”
ceteris paribus
