Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

IB Economics SL > Introduction to economics > Flashcards

Introduction to economics Flashcards

1
Q

What is scarcity?

A

The situation in which available resources are finite whereas wants are infinite

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Outline the relationship between choice and scarcity

A

Choices are dependent on how scarce the resources are and how it is possible to best satisfy needs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is economics?

A

The study of choices leading to the best possible use of scarce resources in order to best satisfy unlimited human needs and wants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Define sustainability

A

Maintaining the ability of the environment and the economy to continue to produce and satisfy needs and wants into the future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Define sustainable resource use?

A

The preservation of the environment over time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Why is there a problem of sustainability?

A

Because resources are scarce.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is economic growth?

A

The increase in the amount of goods and/or services produced in an economy GDP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

List the four factors of production

A
  1. Land
  2. Labour
  3. Capital
  4. Entrepreneurship
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is entrepreneurship?

A

A human skill involving the ability to innovate, take business risks, and to seek new opportunities for opening and running a business. This manages other factors of production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is efficiency?

A

Making the best possible use of scarce resources in order to avoid waste

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is equity?

A

The idea of being fair or just. Usually used in the sense of equality and inequality i.e. distribution of wealth and human opportunity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is economic well-being?

A

Levels of prosperity, economic satisfaction and standards of living among members of a society

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is resource allocation?

A

Assigning available resources or factors of production, to specific uses chosen among many possible alternatives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the three basic economic questions?

A

What/how much, how and for whom to produce

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the market method?

A

Resources are owned by private individuals or groups of individuals and it is mainly consumers and firms who make economic decisions by responding to prices that are determined in markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is government intervention?

A

Government makes decisions that affect the economy

17
Q

What is the command method?

A

Resources are owned by the government which makes economic decisions by commands

18
Q

What is capital?

A

Resources than can produce a future stream of benefits

19
Q

What are the different types of capital?

A
  1. Physical capital
  2. Human capital
  3. Natural capital
  4. Financial capital
20
Q

What is opportunity cost?

A

The value of the next best alternative that must be given up or sacrificed in order to obtain something else

21
Q

What are examples of human capital?

A

Skills, abilities and knowledge

22
Q

What are two categories of goods that are free of charge?

A
  1. goods provided by the government

2. Certain natural resources such as clean air and forests

23
Q

What is the circular flow of income model?

A

Illustrates the interdependence that exists between economic decision makers.

24
Q

What are the 2 main sectors in a circular flow of income model?

A

Households and firms

25
Q

What are the household’s two roles?

A

It is assumed that they are the owners of all the factors of production
They are the people who buy the nation’s output of goods and services

26
Q

Draw a circular flow of income model.

A
27
Q

Relate factors of production provided by households to payments to the factor provided by firms

A

Labour- wages
Land- rent
Capital- Interest
Entrepreneurship- Profits

28
Q

What are the 3 additional sectors in the circular flow of income model?

A

Government, financial sector and foreign sector

29
Q

What is a leakage?

A

The income that leaves

30
Q

What are types of leakages?

A
  1. Taxes
  2. Saving
  3. Imports
31
Q

What is an injection?

A

Sectors that are responsible for introducing income into the circular flow

32
Q

What are three types of injections?

A
  1. Government spending- education, health care- affect the level of national income
  2. Investment- financial sector loaning money to firms
  3. Exports- foreign households and firms buy the country’s exports injecting money into the economy
33
Q

Draw and label the circular flow of income with the three additional sectors.

A
34
Q

What is the GNI?

A

Gross National Income- amount of income flowing in the circular flow is the national income

35
Q

What is the circular flow of income useful for?

A

Showing the interdependence existing between the 5 sectors

36
Q

What happens if leakages>injections?

A

Economy shrinks - goes into recession

IB Economics SL (17 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions