Lesson 1 Flashcards
What is the role of graphs in economics?
Graphs show the relationship between two variables, usually referred to as independent and dependent variables.
What does “ceteris paribus” mean, as used in economics?
Assumption that any influences other than the variable(s) being considered are held constant. Literally, “all else being equal.”
What is the meaning of a graphed plot with a negative slope?
The two variables move in opposite directions (i.e., the dependent variable decreases as the independent variable increases).
Define “economics”?
Study of the allocation of scarce economic resources among alternative uses
Identify the intercept on a graph.
The point at which the plotted line intersects the y-axis (i.e., at the zero point on the x-axis)
What is international economics?
Economic activities that occur between nations and outcomes that result from those activities
Identify the x-axis and y-axis of a graph.
The x-axis is the horizontal line; the y-axis is the vertical line. (To help remember, the letter “Y” has a vertical element to it.)
Identify the major divisions of the field of economics.
Microeconomics
Macroeconomics
International economics
What’s macroeconomics?
The economic activities and outcomes of a group of entities taken together, typically of an entire nation or major sectors of a national economy
What is the meaning of a graphed plot with a positive slope?
The two variables move in the same direction (i.e., the dependent variable increases as the independent variable increases).
What is a time-series graph?
A graph showing changes in a variable over time. Commonly, time is considered the independent variable and plotted on the horizontal x-axis.
What are the characteristics of a command economic system?
Government largely determines the production, distribution and consumption of goods and services (e.g., communism and socialism).
What are the characteristics of a market (free-enterprise) economic system?
Distinct entities determine production, distribution, and consumption in an open market (e.g., capitalism).
What is “microeconomics”?
The economic activities of distinct decision-making entities, including individuals, households, and business firms
What are the major types (extremes) of economic systems?
Command economic system
Market (free-enterprise) economic system
