Introduction To Economics? Flashcards
What are concepts of economy?
- Efficiency
- Security (unlimited wants, limited resources)
- Choice (What to consume and give up)
- Interdependence
- Change
- Economic Well-Being
- Equity
- Sustanability
Economics is a
- Social Science
- Study of people in a society
- Retaining items
Opportunity cost?
Next best alternative given up when a choice is made
Capital?
Physical man made objects
Enterprise
Leaders who bring factors of production to create goods and services
What are 3 basic questions asked in Economics?
What to produce
How to produce
Who to produces
What is an economic system?
What is a gout economic system
Planned economy, communism, Equality, Lack of inceptive
What is a market economic system
Free market economy, capitalism, variety in quality, inequality
What is a free market?
- Economic decisions made by consumers and producers
Private firms
What is a centrally planned market?
Economic decisions made by gout:
- Sums of all production
- Decides how resources are used
What is a production possibilities curve (PPC)?
Model designed to show alternative combinations a firm or country can produce using their maximum resources
What are assumptions of PPC’s?
- 2 goods produced
- Full employment
- Fixed resources
- Fixed technology
What is a constant opportunity cost on a PPC?
REsources can be easily exchangeable to produce either goods leading to constant opportunity cost, this can result in a straight line in a PPC
What is effeciency?
Resources use in the best possible way, no waste and no improvements needed.
What is potential growth?
Increase in maximum current produces potential growth, results in a shift of PPC due to change in quality or quantity of factors of production or important in technology
