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Econ > Foundations Of Economics > Flashcards

Foundations Of Economics Flashcards

1
Q

A person who’s starts their own business

A

Entrepreneur

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2
Q

Examples of factors of production

A

Land
Labor
Capital
Entrepreneur

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3
Q

Difference between shortage and scarcity

A

Shortage- quantity demand is greater than quantity at market place
Scarcity- unlimited human wants vs. limited resources

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4
Q

Economic concept of guns and butter

A

Guns- resources allocated to nations defense

Butter- resources allocated for consumer goods

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5
Q

Opportunity cost

A

Loss of potential gain when alternative is chosen

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6
Q

Trad off

A

Exchange of something of value

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7
Q

What is making a decision at the margin

A

Letting past go and look to future

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8
Q

What does production possibilities curve show

A

A graph that shows alternative ways to use economy’s productive resources

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9
Q

What is the law or increasing costs

A

Explains production possibilities curve

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10
Q

Why are all goods scarce

A

Resources are limited

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11
Q

What does decision making grid do

A

Helps make decisions in a range or context

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12
Q

Example or human capital

A

Education

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13
Q

Production possibility frontier

A

Economy at most efficient level

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14
Q

Why are free market economies able to attain economic growth

A

Competition allows for innovation and growth

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15
Q

What economy is the United States

A

Free market

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16
Q

Main incentive for manufacture to sell product

A

Profit

17
Q

Characteristics of centrally planned economy

A

Government has authority, makes economic decisions

18
Q

Traditional economy

A

Roles and economic decisions defined by customs

19
Q

When government provides safety net which economic goal is met

A

Bad conditions; natural disasters, injuries or job loses

20
Q

3 basic economic questions

A

What to produce?
How to produce?
Who to produce for?

21
Q

What do people supply on return for factor payments

A

Land
Labor
Entrepreneurship

22
Q

Who created “invisible hand”

A

Adam Smith

23
Q

What does specialization do for economy

A

Improves productivity

24
Q

Economic goal concerned with using resources wisely and reduce waste

A

Economic efficiency, provide people with minimum standard and quality life

25
Q

Working where you want is an example of what economic goal

A

Economic freedom

26
Q

Innovation leads to what economic goal

A

Economic growth

27
Q

Difference between command & market economy

A

Command- central authority determines basic functions/ production
Market economy- producers/ consumers determine production

Econ (2 decks)

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