Intro to Economics and Microeconomics Flashcards
focuses on individual decision-making units and how they interact
Microeconomics
explores the economy as a whole
Macroeconomics
the fixed amount of goods or services available
Scarcity
an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rule and manner of their distribution also referred to as a subsistence economy, a traditional economy is defined by bartering and trading
Traditional economy
an economic system in which the means of production are publicly owned and economic activity is directed by a central government or portion of the government
Command economy
an economic system in which the forces of supply and demand determine what goods and services are produced
Market economy
an economy which practiced characteristics of both command and market economies; supply and demand largely influence the economy, but there is government intervention to meet certain economic goals
Mixed economy
the cost of choosing; what you give up by choosing one option
Opportunity cost
objects that can fulfill human wants/needs, provide utility
Goods
economic activity that is intangible; provides utility, but cannot be stored
Services
natural and human resources from which all goods and services must be produced
finite, but not fixed (scarcity)
Endowment
satisfaction; economists assume maximizing this drives individual choice; measured in utils
Utility
the tendency of people to engage in activities that will lead to monetary gain
Profit motive
the economic power of the individual in a free market
Consumer sovereignty
requirements the government places on private firms and individuals to achieve the government’s goals
Government regulation
