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Basic Microeconomics > Introduction to Economics > Flashcards

Introduction to Economics Flashcards

1
Q

A system for deciding how to manage scarce resources.

A

Economy

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2
Q

How you effectively allocate scarce resources for your unlimited wants and needs.

A

Economic Way of Thinking

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3
Q

The limitedness of economic resources.

A

Scarcity

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4
Q

A social science that studies how societies allocate their limited resources to satisfy their needs and wants.

A

Economics

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5
Q

A branch of economics that deals with analyzing the smallest unit in the economy (household)

A

Microeconomics

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6
Q

What is the economic problem?

A

Scarcity, having not enough resources

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7
Q

It is having not enough resources to satisfy everyone’s wants and needs.

A

The Economic Problem

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8
Q

What are wants?

A

Desires

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9
Q

The essentials or necessities for survival.

A

Needs

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10
Q

The value of the forgone opportunity to obtain an alternative.

A

Opportunity Cost

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11
Q

There is no free lunch.

A

Nothing is free in this world.

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12
Q

What are the Four Resources in Microeconomics?

A

Labor
Managerial Skills
Capital
Land

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13
Q

It pertains to manpower or human effort.

A

Labor

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14
Q

It refers to the capacity to make managerial, optimal, and informed decisions.

A

Managerial Talent or Entrepreneurship

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15
Q

It pertains to tools and machinery that depreciate in value.

A

Capital

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16
Q

It is the space where operations happen.

A

Land

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17
Q

It is when people make choices to maximize their own happiness and satisfaction, even though they may not always make perfect decisions.

A

Purposeful Behavior

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18
Q

What is Purposeful Behavior?

A

It is when people make choices to make themselves happy and satisfied, even if they don’t always make the best choices.

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19
Q

How do we weigh costs and benefits?

A

Become purposeful and rational rather than random or chaotic.

20
Q

It means having a little more or a little less of something.

A

Marginal

21
Q

It means extra or additional.

A

Marginal Values

22
Q

It refers to the value of the perceived measure or utility. Your gains.

A

Marginal Benefits

23
Q

It is the added expense over the original cost.

A

Marginal Cost

24
Q

The comparison of two marginal values (Marginal Benefit and Marginal Cost) for decision-making.

A

Marginal Analysis

25
Q

When do we upsize a drink?

A

When Marginal Benefit is greater than Marginal Cost.

26
Q

When shouldn’t we upsize a drink?

A

When Marginal Cost is greater than Marginal Benefit.

27
Q

A financial constraint or limitation.

A

Budget

28
Q

A graphical representation that shows various combinations of two products buyers can purchase given a specific income.

A

Budget Line

29
Q

It shows the attainable and unattainable combinations of two products buyers can purchase given a specific income.

A

Budget Line

30
Q

In the budget line, it shows the attainable, beneficial, and possible combinations

A

Combinations within the curve

31
Q

It shows the unattainable, inefficient, impossible combinations in the budget line.

A

Combinations outside the curve

32
Q

It is an economic tool that measures possible alternative combinations of two products using the income of a buyer.

A

Budget Line

33
Q

PPF

A

Production Possibilities Frontier

34
Q

A graphical representation of the maximum amount of two different goods a company or country can produce.

A

PPF

35
Q

Production Possibilities Frontier assumes:

A

Full Employment
Fixed Resources
Fixed Technology
Two Goods

36
Q

Declarative economic statements that are factual.

A

Positive Economics

37
Q

Suggestive economics that provides standards that are theoretical.

A

Normative Economics

38
Q

It is also known as Theoretical economics

A

Positive Economics

39
Q

An economics that focuses on facts and cause-and-effect relationships.

A

Positive Economics

40
Q

Scientific-based analysis good for policy and political analysis

A

Positive Economics

41
Q

Economics that looks at the world as it is.

A

Positive Economics

42
Q

Economics that shows what ought to be

A

Normative Economics

43
Q

It is also known as Policy Action

A

Normative Economics

44
Q

Economics that incorporates value judgment about what the economy should be like.

A

Normative Economics

45
Q

It recommends particular policy actions to achieve a desirable goal.

A

Normative Economics

46
Q

“It’s a good idea for the government to spend more on infrastructure projects because it boosts GDP growth and enhances the country’s infrastructure.”

A

Normative Economics

47
Q

“More spending on infrastructure projects led to higher GDP growth in the past five years.”

A

Positive Economics

Basic Microeconomics (3 decks)

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