INTRODUCTION TO ECONOMICS Flashcards
comes from the Greek word oikos and nomos which means household management
economics
commodity or service being short in supply relative to its demand
scarcity
reasons for scarcity
• overpopulation
• unjust distribution
• resources decrease
according to bautista, ________ is a science that deals w/ the management of scarce resource
economics
according to him, economics is simply scarcity and choice
slavin
all other things are held constant/equal
ceteris paribus
methodology of economics (2)
• positive
• normative
is an economic analysis that considers economic conditions “as they are” / “as it is”
positive economics
example of positive economics
the economy is now experiencing a slowdown because of too much politicking and corruption in the government
incorporates value judgment about economics about ehat the economics should be like
“as it should be”
normative economics
basic economic problems (3)
• what to produce
• how to produce
• for whom to produce
all natural resources given by the nature used in the production process
land
any form of human effort exerted in the production
talents available for production
labor
refers to the human made goods used in the production of other goods and services
manufacturing aids
capital
process of producing and purchasing capital goods
investment
consumer goods satisfy wants directly while capital goods…
indirectly by aiding production of consumer goods
the person who organizes, manages and plans
special human resources, distinct from labor
entrepreneur
money in factors of production
• land - rent
• capital - interest / money
• labor - salary
• entrepreneur - profit
produce more and better goods and services or higher standard of living
economic growth
provides suitable jobs for citizens
full employment
achieve maximum fulfillment of wants using the available productive resources
economic efficiency
avoid inflation and deflation, upswings or downswings
price level stability
guarantees businesses have a high degree of freedom in economic activities
economic freedom
ensure that no group of citizens faces poverty
equitable distribution of income
provide those who are chronically ill, disabled, laid off, aged to earn minimal levels of income
economic security
seek a reasonable balance in international trade and financial transaction
balance of trade
is the branch of economics that deals with the individual decisions of units in the economy
microeconomics
branch of economics as a whole
macroeconomics
collection of specific economic units treated as if they were one unit
aggregate
a particular set of institutional arrangements and a coordinating mechanism to respond to economizing problem
economic system
places where buyers and sellers come together
market
places where buyers and sellers come together
market
subsistence economy, backward type, characterized by a system where the production of products trading and distribution of incomes are sanctioned by custom
traditional
economy wherein government dictates
command
resources are privately owned and people themselves makes the decision
“market economy”
capitalism
economic system wherein key enterprises order are owned by the state
socialism
this economy is a mixture of the market system and command system
mixed system
also known as laissez-faire capitalism
pure competition
importance of studying economics
• understand society
• understand global affairs
• to be an informed individual
