Economics 101 Flashcards
Alfred Marsh def
“a study of wealth, and a study of man”
Opportunity Cost
whatever you give up to do something
Scarcity
the tension between infinite wants and finite resources
Incentives
external (rather than intrinsic) motivators that explain people’s choices
Macroeconomics
the study of production, employment, prices, and policies on a nationwide scale
Microeconomics
the study of how consumers, workers, and firms interact to generate outcomes in specific markets
division of labor
splitting the mode of production into specialized jobs for more people
trade
offering specialized services/goods for other services/goods
PPF
production possibilities frontier: the combinations of two things being produced when resources are used efficiently
command economy
an economy that is completely controlled by the government
planned economy
the allocation of resources is determined by the government
product market
anywhere goods and services are bought and sold
market
any place where buyers and sellers meet to exchange goods & services
price signals
the information that markets naturally generate to guide the distribution of resources
supply and demand
the dynamic between the amount of a product and the desire for it that regulates its price
