Econ Unit 1

Question 1

Microeconomics

Answer 1

focuses on individual decision-making units and how they interact

Question 2

Macroeconomics

Answer 2

explores the economy as a whole

Question 3

Scarcity

Answer 3

fixed amount of goods and services available

Question 4

Traditional Economy

Answer 4

traditions, customs, and beliefs help shaped the goods and services the economy produces, as well as the manner of their distribution. AKA a subsistence economy. Defined by bartering and trading

Question 5

Command Economy

Answer 5

the means of production are publicly owned and economic activity is directed by a central government or part of the government

Question 6

Market Economy

Answer 6

the forces of supply and demand determine what goods and services are produced

Question 7

Mixed Economy

Answer 7

has characteristic of command and market economies; supply and demand largely influence the economy, but the government intervenes to meet certain economic goals

Question 8

Opportunity Cost

Answer 8

the cost of choosing; what you give up by choosing 1 option

Question 9

Goods

Answer 9

objects that can fulfill human wants/needs, provides utility

Question 10

Services

Answer 10

economic activity that is intangible; provides utility, but cannot be stored

Question 11

Endowment

Answer 11

natural and human resources from which all goods and services must be produced. finite but now fixed.

Question 12

Utility

Answer 12

satisfaction; economists assume maximizing this drives individual choice; measured in utils

Question 13

Profit Motive

Answer 13

the tendency of people to engage in activities that will lead to monetary gain

Question 14

Consumer Sovereignty

Answer 14

the economic power of the individual in a free market

Question 15

Government Regulation

Answer 15

requirements the government places on private firms and individuals to achieve the government’s goals

Question 16

Marginal Utility

Answer 16

additional increment of utility associated with consuming one more unit of a good or service

Question 16

Margin

Answer 16

in a succession of units, the specific unit you are focusing on

Question 17

Total Utility

Answer 17

the total satisfaction derived from consuming a specific quantity of a good or service; the total of marginal utilities for all individual units consumed

Question 18

Satiate

Answer 18

satisfy

Question 18

Initial Decision

Answer 18

over-simplified decision-making process based on utility (consume until marginal utility =0)

Question 18

Bliss Point

Answer 18

maximization of utility

Question 19

Marginal Analysis

Answer 19

evaluation the impact of one additional unit

Question 20

Util

Answer 20

a measure of utility

Question 20

Diminishing marginal productivity

Answer 20

initially, one input increases the initial successive units of input toward the output, but eventually this will add to less output

Question 21

Balancing @ the Margin

Answer 21

maximizing utility in light of scarcity

Question 22

Discounting the Future

Answer 22

utility diminished the further in the future that utility is realized