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G12 ABM - 1ST GRADING > ECON PRELIM > Flashcards

ECON PRELIM Flashcards

1
Q

economy comes from the Greek word

A

oikonomia meaning household management

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2
Q

Father of Modern Economics

A

Adam Smith

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3
Q

Wrote the first book in economics:

A

adam smith, “An inquiry Into the Wealth of Nations”

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4
Q

study of how society manages its scarce resources which have alternative uses to produce goods and services to satisfy insatiable/ unlimited wants.

A

economics

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5
Q

2 main branches of economics

A

microeconomics and macroeconomics

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6
Q

Study of the behavior of individual units in the economy

A

microeconomics

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7
Q

Firms, industry, and market

A

microeconomics

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8
Q

Study of the economy as a whole

A

macroeconomics

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9
Q

It is based on facts or theory; what is; deals with cause and effect relationship of economic phenomena.

A

positive economics

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10
Q

It is based on value judgment or opinion; what ought to be?; cannot be tested

A

normative economics

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11
Q

this refers to a tool used by economists to explain economic phenomena. It uses assumptions to simplify reality.

A

model

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12
Q

an explanation of why-things are as they are.

A

theory

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13
Q

is a conjecture/ proposition that is subjected to empirical verification.

A

hypothesis

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14
Q

This is experienced when firms are able to reduce the per unit cost of producing the output. In simple terms, the firm maximizes the output at lowest possible cost.

A

economic efficiency

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15
Q

refer to tangible and intangible things that can satisfy human wants. Examples of these are: Food, shelter, services.

A

goods

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16
Q

types of goods

A

free goods and economic goods

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17
Q

can be acquired at zero price.

A

free goods

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18
Q

scarce or limited and have price. Example: Clothes, foods

A

economic goods

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19
Q

are those that are ready for final consumption.

A

final goods/finished goods

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20
Q

are those used for further production of a good into finished products.

A

intermediate goods/ semi-finished goods

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21
Q

what are the factors for production

A

capital
labor
land/natural resources
entrepreneurship

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22
Q

a simple depiction of the macroeconomy
 illustrates GDP as spending, revenue, factor payments, and income

A

circular-flow diagram

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23
Q

own the factors of production,
sell/rent them to firms for income
▪ buy and consume goods & services

A

households

24
Q

buy/hire factors of production,
use them to produce goods and services
▪ sell goods & services

A

firms

25
Q

what the diagram omits

A

government, foreign sector, financial system

26
Q

collects taxes, buys g&s

A

government

27
Q

matches savers’ supply of funds with borrowers’
demand for loans

A

financial system

28
Q

trades g&s, financial assets, and currencies with
the country’s residents

A

foreign sector

29
Q

The process of improving the quality of all human lives and capabilities by raising people’s levels of living, self- esteem, and freedom.

A

development

30
Q

This is the study of the allocation of scarce resources which have alternative uses to produce goods and services to satisfy unlimited human wants.

A

economics

31
Q

The study of how economies are transformed from stagnation to growth and from low-income to high-income status, and overcome problems of absolute poverty.

A

development economics

32
Q

rates of growth of l
 Gross national income (GNI) (monetary growth of GNI per
capita minus the rate of inflation)
 Gross Domestic produce

A

traditional economic measures

33
Q

The Ability to Meet Basic Needs

A

sustenance

33
Q

To Be a Person

A

self-esteem

33
Q

An index measuring national socioeconomic development, based on combining measures of education, health, and adjusted real income per capita.

A

human development index

33
Q

To Be Able to Choose

A

freedom from servitude

33
Q

principles of economics

A
  1. people face TRADE-OFFS
  2. The Cost of Something Is What You Give Up to Get It
  3. Rational People Think at the Margin
  4. People Respond to Incentives
  5. Trade Can Make Everyone Better Off
  6. Markets Are Usually a Good Way to Organize Economic Activity
  7. Governments Can Sometimes Improve Market Outcomes
  8. Country’s Standard of Living Depends on Its Ability to Produce Goods and Service
  9. Prices Rise When the Government Prints Too Much Money
  10. Society Faces a Short-Run Trade- off between Inflation and Unemployment
34
Q

fluctuations in economic activity, such as employment and production

A

business cycle

35
Q

Increasing the amount of money in the economy stimulates the overall level of spending and thus the demand for goods and services.
 Higher demand may over time cause firms to raise their prices, but in the meantime, it also encourages them to hire more workers and produce a larger quantity of goods and services.
 More hiring means lower unemployment.

A
35
Q

increases in the general level of prices.

A

inflation
The faster the government creates money, the greater the inflation rate.

36
Q

the amount of goods and services produced
per unit of labor.

A

productivity

37
Q

: a situation in which a market left on its own fails to allocate resources efficiently.

A

market failure

38
Q

the impact of one person’s actions on the well-being of a bystander

A

externality

39
Q

the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices

A

market power

40
Q

s: the ability of an individual to own and exercise control over scarce resources

A

property rights

41
Q

 Each of these households and firms acts as if “led by an invisible hand” to promote general economic well-being.

A

adam smith

42
Q

something that induces a person to act (e.g. rewards or
punishments)

A

incentives

43
Q

a group of buyers and seller

A

market

44
Q

an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

A

market economy

45
Q

Rather than being self-sufficient, people can specialize in producing one good or service and exchange it for other goods.

A

better off

46
Q

people who systematically and purposefully do the best they
can to achieve their objectives.

A

rational people

47
Q

a small incremental adjustment to a plan of action

A

marginal change

48
Q

This refers to what you give up to get that item or option.

A

opportunity cost

49
Q

means that society is getting the maximum benefits from its scarce resources.

A

efficiency

50
Q

means that those benefits are distributed uniformly among society’s members.

A

equality

G12 ABM - 1ST GRADING (26 decks)

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