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Economics > Introduction to economics definitions > Flashcards

Introduction to economics definitions Flashcards

1
Q

social sciences

A

academic disciplines that study human society and social relationships

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2
Q

microeconomics

A

branch of economics examining behaviour of individual decision-making units in the economy

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3
Q

macroeconomics

A

branch of economics examining the economy as a whole to obtain an overall picture of the economy

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4
Q

scarcity

A

the condition in which available resources are insufficient to satisfy unlimited human needs and wants

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5
Q

choice

A

selecting among alternatives due to scarcity of resources

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6
Q

efficiency

A

making the best possible use of scarce resources to avoid resource waste

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7
Q

allocative efficiency

A

an allocation of resources that results in producing the combination and quantity of goods and services most preferred by customers

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8
Q

equity

A

the idea of being fair or just, often used in connection with income distribution

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9
Q

economic wellbeing

A

refers to levels of prosperity, economic satisfaction and standards of living among members of a society

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10
Q

sustainability

A

refers to the long-term maintenance or viability of any particular activity or policy

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11
Q

interdependence

A

refers to the idea that economic decision-makers interact and depend on each other

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12
Q

intervention

A

typically refers to government intervention, where the government becomes involved with the workings of markets

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13
Q

resources

A

factors of production, used by firms as inputs in the production process

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14
Q

factors of production

A

all resources, or inputs (land, labour, capital, entrepreneurship) used to produce goods and services

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15
Q

economics

A

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

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16
Q

land

A

consists of all natural resources, including all agricultural and non-agricultural land, and everything above or below land

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17
Q

labour

A

includes the physical and mental input that people contribute to the production of goods and services

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18
Q

capital

A

refers to resources that can provide a future stream of benefits

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19
Q

physical capital

A

a man-made resource used to produce goods and services that enable production of more output

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20
Q

human capital

A

refers to the skills, abilities and knowledge acquired by people

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21
Q

natural capital

A

expand meaning of ‘land’, including everything involved in land, as well as additional natural resources in the environment

22
Q

financial capital

A

refers to investments in financial instruments, like stocks, bonds and funds

23
Q

entrepreneurship

A

a special human skill possessed by some people, who organise the other factors of production, innovating and taking risks

24
Q

opportunity cost

A

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

25
Q

free good

A

a good that is not scarce, and therefore has zero opportunity cost

26
Q

economic good

A

any good that is scarce, and has an opportunity cost greater than zero

27
Q

resource allocation

A

assigning available resources to specific uses chosen among many possible alternatives

28
Q

redistribution of income

A

when income distribution or output changes so that different social groups now receive more or less than previously

29
Q

distribution of income

A

idea concerned with how much of an economy’s total income different individuals or groups in a population receive

30
Q

government intervention

A

where the government changes the allocation of resources (and distribution or output and income) from what markets would have achieved on their own

31
Q

free market economy

A

an ‘ideal’ economy based on the market approach to economic decision-making, involving private sector ownership and decision-making

32
Q

planned economy

A

an economy where all decision-making is carried out by government planning, rather than reliance on prices determined in markets

33
Q

mixed economy

A

an economy that combines the command approach with the market approach to resource ownership, decision-making and rationing

34
Q

rationing

A

a method used to apportion something between its interested users

35
Q

model

A

simplified representation of something in the real world being investigated that allows us to focus on important relationships

36
Q

Economic growth

A

refers to increase in the production of goods and services, as resources are rearranged so as to be more valuable

37
Q

Actual growth

A

increase in the real national income of the economy (movement inside curve due to increased demand and long-term productive capacity)

38
Q

Potential growth

A

increase in the productive capacity of the economy (curve itself shifts), due to greater quantity/quality of resources of new technology.

39
Q

Consumer goods

A

Goods that satisfy present wants/needs

40
Q

Capital goods

A

Goods that satisfy future wants/needs, extending production possibilities

41
Q

Leakages

A

money or resources removed from the main flow of income, through savings, taxes, or imports

42
Q

Injections

A

money of resources added to the main flow of income, through investment, gvt spending or exports

43
Q

Closed economy

A

an economy with no imports/exports, with only a four-level model

44
Q

Open economy

A

An economy that is freely importing/exporting, containing all 5 levels

45
Q

Market

A

any kind of arrangement where buyers and sellers of goods, services or resources are linked together to carry out an exchange

46
Q

Demand

A

the various quantities of a good or service the consumer is willing and able to buy at different possible prices during a particular time period, ceteris paribus (about behaviour of buyers of goods/services/resources)

47
Q

PPC

A

represents all combinations of the maximum amount of 2 goods that can be produces by an economy, given its technology and resources, where there is full employment of resources and efficiency in production.

48
Q

Production possibilities

A

all possible combinations of maximum amount of 2 goods that can be produced by an economy, given a fixed and unchanging resources and technology, where there is full employment of resources and efficiency in production.

49
Q

Logic

A

a method of reasoning which involves making a series of statements each of which is true if the preceding statement is true.

50
Q

Hypothesis

A

An educated guess, indicating a cause-and-effect relationship about an event. Predictions are made through empirical evidence.

51
Q

Empirical evidence

A

Real world information, observation and data obtained from our senses and experience

52
Q

Theory

A

A general explanation of a set of interrelated evens, usually (though not away) based on several hypothesis that have been tested successfully.

Economics (3 decks)

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