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Gov and Econ > Economics Vocab Quiz 1 > Flashcards

Economics Vocab Quiz 1 Flashcards

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1
Q

Principle 1: People face tradeoffs

A

To get one thing, we usually have to give up another

Ex: guns vs. butter

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2
Q

Efficiency

A

society gets the most that it can from its scarce resources

“How big is the pie”

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3
Q

Equity

A

The benefits of resources are distributed fairly among the members of society

“How the pie should be cut”

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4
Q

Principle 2: The cost of something is what you give up to get it

A

Decisions require comparing costs and benefits of alternatives

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5
Q

Cost

A

What you give up to get something

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6
Q

Oppurtunity cost

A

What you give up to obtain an item

Singular

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7
Q

Marginal changes

A

Small, incremental adjustments to an existing plan of action

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8
Q

Market economy

A

An economy that allocates resources through the decentralized decision of many firms and households as they interact in markets for goods and services

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9
Q

Households

A

decide what to buy and who to work for

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10
Q

Firms

A

decide who to hire and what to produce

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11
Q

Invisible hand

A

Adam Smith’s idea that when economies are left alone prices tend to guide trends to maximize welfare

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12
Q

Market failure

A

Occurs when the market fails to allocate resources efficiently

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13
Q

Externality

A

Impact of one person or firm’s actions on the well-being of a bystander

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14
Q

Market power

A

Ability of a single person or firm to unduly influence market prices

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15
Q

Productivity

A

Amount of goods and services produced from each hour of a worker’s time

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16
Q

Inflation

A

Increase in the overall level of prices in the economy

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17
Q

Phillips Curve

A

Illustrates the tradeoff between inflation and unemployment

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18
Q

Need

A

basic requirement for survival

Ex: food, clothing, shelter

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19
Q

Want

A

Means of expressing a need

20
Q

Free products

A

Sunshine or air

Plentiful and no one could own them and no price could be placed on them

21
Q

Economic products

A

Goods and services that are useful, relatively scarce and transferable to other

22
Q

Goods

A

Tangible commodity

23
Q

Consumer good

A

Intended for final use by individuals

24
Q

Capital good

A

Manufactured good used to produce other goods and services

25
Q

Durable good

A

Any good that lasts longer than 3 years

26
Q

Nondurable good

A

an item that lasts for less than 3 years

Ex: food, clothing, paper

27
Q

Service

A

Work that is performed for someone

Nontangible

Ex: haircuts, home repairs

28
Q

Consumers

A

people who use goods and services to satisfy wants and needs

29
Q

Consumption

A

the process of using up goods and services in order to satisfy wants and needs

30
Q

Conspicuous consumption

A

the use of a good or service to impress others

Ex: expensive cars, jewerly, shoes

31
Q

Value

A

refers to something that has a worth that can be expressed in dollars

32
Q

Utlity

A

The capacity of something to be useful to someone

Varies from person to person, no set value

33
Q

Wealth

A

the sum of those economic products that are tangible, scarce, useful, and transferable from one person to another

34
Q

Marginal utlity

A

is the additional satisfaction a consumer gains from consuming one more unit of a good or service

35
Q

Production

A

process of creating goods and services

36
Q

Productivity

A

the efficient use of productive resources

37
Q

Specilization of labor

A

productive imputs do whatever task that are able to do best

division of labor

38
Q

Market

A

location or other mechanism that allows buyers and sellers to deal readily in a certain economic product

39
Q

Circular flow

A

individuals earn their incomes in factor markets

40
Q

Factor markets

A

the markets where productive resources are bought and sold

41
Q

Scarcity

A

the condition that arises because society does not have enough resources to produce all the things people would like to have

42
Q

Factors of Production (inputs)

A

Land

Capital

Labor

43
Q

Land

A

refers to the “gifts of nature”

Natural resources that are not created by human effort

44
Q

Capital

A

the tools, equipment, and factories used in the production of goods and services

45
Q

Labor

A

people with all their efforts, abilities, and skills

Does not include entrepreneurs

Gov and Econ (13 decks)

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