Economics Unit 1 Flashcards
(25 cards)
what is microeconomics?
study of decision making of small groups/individuals
what is macroeconomics?
decision making of large group/countries
what are the four factors of production?
land, labor, capital
define economics
how people use scarce and limited resources to satisfy wants and needs
describe a want
way of expressing a need
describe a need
basic requirement for survival
what makes an item scarce?
limited in quantity, desired, useful in more than one way
what is utility?
the amount of usefulness or satisfaction we get from something
define marginal utility
the extra amount of enjoyment we get from an extra item
what is an example of marginal utility?
another slice of pizza, watch another tv show
what is diminishing marginal utility?
explains that we as consumers will appreciate something less and less the more we use or acquire
why is there no such thing as a free lunch?
opportunity cost
describe opportunity cost
cost of the next best alternative use of money, time or resources
what are entrepreneurs?
risk takers who start a business
describe a good
an economic good that is tangible. It satisfies a want or need
what is work performed for someone?
service
what is value determined by?
scarcity and how much the item is desired
describe consumer goods
stuff you buy to use for yourself
describe capital good
things that can be used to make consumer goods
what is the difference between durable/non durable goods?
durable goods are items that can last 3 years or more
what is wealth?
the accumulation of those products that are tangible, scarce, useful and transferable from one person to another
define law of comparative advantage
an individual, firm or region with the lowest opportunity cost of producing good should specialize in that good
define absolute advantage
the ability to produce something using fewer resources than other producers
what is an example of diminishing marginal utility?
The 5th slice of pizza isn’t as good as the first or second slice
