Lesson 1-2 pg. 1 - 9 Flashcards
Define economics
> economics - study of choices that individuals and societies make in the production, distribution, and consumption of goods
How does a good understanding of economics help?
> manage personal and national economic affairs in accordance with God’s Word
manage our household incomes wisely, achieving a good standard of living for ourselves and our families
run a business or carry on a profession
save money intelligently
understand a government’s functions, such as taxing and spending
choose political leaders who are economically sensible
see how nationwide and worldwide economic policies affect us all
Describe the ancient Greeks and Romans idea of economics versus the modern idea of economics
> economics means “house law” in Greek
ancient idea of economics: art of managing a household or private estate
modern idea of economics: usually refers to something bigger than a single household
Define economy
> economy - any system for production, distribution, and consumption of goods and services
Define civilization
> civilization - a condition of human society marked by the existence of towns and cities, educated persons, efficient food production, elaborate arts and crafts, savings, and much real and personal property
Define economists
> economists - scholars of production, distribution, and consumption of goods within an economy
List and define the two different levels that economics can be dealt with
> Macroeconomics - study of national and international economies and how these major economies are affected by large-scale choices and public policies
(“macro-“ is Greek for “large”)
microeconomics - study of specific components within a major economy and how the choices made by major economy and how the choices made by individuals, households, and businesses affect that economy
(“micro-“ is Greek for “small”)
Describe macroeconomics
> concerned with phenomena such as national unemployment, inflation, and interest rates
Describe microeconomics
> focus in on how individuals make decisions, what is on how individuals make decisions, what firms can do to maximize their profits, and the different types of economic structures that we observe in various industries
Describe economist’s job
> try to figure out why an economy works as it does
gather facts and figures, such as nation’s rate of inflation or percentage of unemployed people, and then use this information to build economic models
Describe economic models
> seek to show relationships among various components of an economy
attempt to explain effect that a change in one part of an economy may have on other components
based on ideas that attempt to explain how the economy works and why people respond the way they do
Define economic theories or principles
> ideas that attempt to explain how the economy works and why people respond the way they do
Describe economic forecast
> seeks to help those making decisions to make wise choices
>economists trying to predict what will happen to an economy in the future
When economists refer to a good, they mean what?
> good - tangible item that people want and for which they will pay
examples: food and clothing
When economists refer to services, they mean what?
> services - intangible goods produced by labor for which people expect to pay
examples: medical attention, lawyer’s advice
