economics Flashcards
Microeconomics
(small) is talking about one business. It is also a branch. It studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these
individuals and firms.
Macroeconomics
(BIG) Talking about all of the businesses. It is a branch of economics dealing with PERFORMANCE, STRUCTURE, BEHAVIOR, and DECISION MAKING of an economy as a whole.
Modern economists
The study of how man allocates scares resources, which has alternatives use, to achieve given goals…..The fact that there is a trade-off, or opportunity cost, involved in production and consumption.
Is Economics a social science?
It is a science because it consists of consists of an organized body of knowledge. Also, economists use a set method of inquiry, called the scientific method, in order to formulate theories and general laws.
It is social science, as it deals with human behavior in society
Can resourced be used to create wealth?
YES
economics is a social science that deals with:
- The creation of wealth from scarce resources
- The production and distribution of goods and services for consumption
- The behavior, interaction and well-being of the groups involved in the above activities
- The fact that there is a trade-off involved in production and in consumption.
A FREE GOOD Definition
is one that is so readily available that consumers do not have to make a sacrifice to use it, for example clean air, sunlight, rain, snow.
An ECONOMIC GOOD definition
is one for which a consumer does have to make a sacrifice to use it. Example: soil, oil, fruits.
Economic
systems exist at a number of levels: we refer to the
global economy, or to the Caribbean economy or, at a
local level, to the economy of St. Kitts and Nevis.
Notes
The economy of St. Kitts and Nevis creates jobs and incomes for people on these islands and trade with other Caribbean countries and the wider world.
Notes
An economic system:
Organizes resources for the production of goods and services.
Satisfies the wants and needs of people who are part of that system
The economic system helps society to answer the ‘three economic questions’.
What goods and services should be produced (consumptions)?
How are they to be produced and in what quantities (productions)?
Who should receive the goods (distribution)?
The three main groups in the economy are :
households, firms, and the government
HOUSEHOLD
A household is one decision-making unit. In economics, two assumptions are made about households.
First, households consume goods and services. Second, households are the owners of the factors of production. (land, labor, capital and entrepreneurship).
A factor of production (factor input) is any resource used to produce goods and services.
FIRM
A firm is also a decision-making unit. This is the unit that produces goods and services. To produce these goods and services, firms buy factor services from households.
