Introduction To Economics Flashcards
What is the focus in economics?
The scarcity of resources in a limited supply. These resources make goods and provide services?
What questions are asked in economics?
What to produce? (Output)
How to produce? (Input)
For whom to produce? (Distribution question)
What are two critical concepts in economics ?
Production and distribution
What are needs?
Things we need to sustain life
What are wants?
Things one would like to have that aren’t a necessity
What is supply and demand?
As demand for product increases then price tends to increase and vice versa
T of F : In market systems the demand is determined by the people?
TRUE
How is output solved in command economies?
Through the government choosing was is produced and sold
Two types of inputs?
Labour intensive and Capital intensive
How can governments influence the distribution question?
Take away resources from the rich and distribute among the poor through things like tax
What are 3 types of goods?
Durable/investment goods - things that last for many years that could return a service
Semi durable - goods that last long but not as long as durable goods
Non durable goods - Goods that are gone once used
What are the factors of production?
Land
Labour
Capital
Entrepreneurship
What is an economic system?
Defines the way in which people relate to eachother in an economic sense.
What are the important characteristics of economic systems ?
How property rights are defined?
How decisions are made?
What are property rights?
Concerns the ownership of things such as whether land legally belongs to someone.
What types of economic systems are there?
Traditional
Command
Mixed
Capitalist
What is the most important characteristic of traditional economic systems?
Things did not change in terms of where people lived, what they did for work and their belief system
What is an advantage of a traditional economic system?
It’s predictable one can live a very secure life.
What is feudalism?
Economic arrangement characterised by a very hierarchical form of society .
Where did the capitalist revolution start?
England
What is a critical characteristic of the capitalist system?
Private OWNERSHIP
What is the command systems.
Government owns the factors of production and decides how to employ them in the production process.
Why was 1776 significant in economics?
Adam smith released “Am inquiry into the nature and causes of the wealth of nations”
What is mercantilism?
The way of thinking where exporting is good and importing is bad
Key ideas of Smiths book?
Gold wasn’t = to rich
Government shouldn’t intervene in economy
People should be allowed to act out of self interest
What is the subsistence level?
The level where one can just survive
What were the classes of 19th century England?
Landowners
Capitalists
Labourers
