Economics Flashcards
Refers to social science that deals with the efficient and effective allocation of limited recources of government, businesses and individuals. It focuses with the effectiveness of producing, contributing and consuming of products
Economics
Refers to the state of being short on resources in order to satisfy the limitless needs and desires of a citizen.
Scarcity
It is something that you must have in order to survive. For example, basic needs like air, food, water, shelter, sleep etc.
Needs
It is something that we desire but unimportant in daily life. For example, mobile phone, laptop, jewelries, car etc
Wants
Two types of scarcity:
Relative Scarcity
Absolute Scarcity
A resource that are limited to satisfy infinite demand
Relative Scarcity
Refers to the fore gone benefit or value that would have been obtained by choosing an alternative over another. Alternately, some of us call this as the trade off
Opportunity Cost
Refers to a situation where you have to make a decision over another in order to have more beneficial result
Trade off
Refers to the resources consumed in production in order to make products and services. “in layman’s term they are inputs used for the production process
Economic Resources
3 economic resources:
Land, Labor, Capital
Study of people in the organization or society and how people behave and influence the world that surrounds them
Social Science
A principles in economic which analyze how people create and execute choices in distributing limited resources for the satisfaction of limitless wants and needs based on their social behavior
Economics as social science
Is the use of scientific method and knowledge in order to achieve practical or effective result to be used in decision making
Applied science
Refers to the use of economic concepts and theories and their application in real life scenarios and conditions
Economics as applied science
Two division of economics:
Macroeconomics
Microeconomics
Division of economic that is concerned with the studies how an overall performance of the entire economy behaves,attempts to quantify the performance of the entire economy in different aspects.
Macroeconomics
Division of economics that studies the implications of decisions each individuals and firms and how it affects the utilization and allocation of limited resources. It also focuses on relativity or response of every individuals to change in prices, allocation of resources and method of production
Microeconomics
The fundamental problem in economic is the satisfaction of limitless wants and needs and dealing with the limited and scarce resources
Basic problems of society
Main issues are:
What to produce and how much
How to produce
For whom to produce
This is how the society responds to the basic economic problems. This could be a simple or complex structure of how the society produce, allocate limited resources and distribute goods and services
Economic system
It is a system where decision relies on conventions, observances, history and practice of beliefs. This is a system where the tradition is the model in executing economic choices including manners of methods on producing allocating and distributing products like goods and services
Traditional economy
This is the kind of system where the basic economic problems are weighed on the shoulders of the government. The state or agency of government. The state or maybe in charge in the allocation of resources by using its political in answering the basic economic problems
Command economy
This is the kind of system where the choices on what to produce, how to produce or whom to produce is weigh on the shoulders of the consumers and producers. This is not absolute due to uncertainties like calamities and national emergencies
Market economy
When resources are short in supply
Absolute scarcity
3 economic system
Traditional economy
Command economy
Market economy
