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Info Systems Quiz 1 > Macro Quiz 1 > Flashcards

Macro Quiz 1 Flashcards

1
Q

Scarcity

A

society has limited resources, and, therefore, cannot produce all the goods and services people want

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2
Q

Economics

A

study of how society manages its scare resources

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3
Q

How many principles of economics?

A

ten principles

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4
Q

Principle 1

A

people face trade-offs, “no such thing as free lunch”

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5
Q

Example of classic trade-off

A

“guns and butter”, the more a society spends on the military, the less it can spend on consumer goods

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6
Q

Efficiency

A

society is getting the greatest benefits from its scarce resources

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7
Q

Equality

A

those benefits are distributed uniformly among society’s members

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8
Q

Principle 2

A

the cost of something is what you give up to get it

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9
Q

Opportunity cost

A

what you give up to get an item

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10
Q

Principle 3

A

Rational people think at the margin

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11
Q

Rational people

A

systematically and purposefully do the best they can to achieve their goals, given the available opportunities

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12
Q

Marginal change

A

incremental adjustment to an existing plan of action

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13
Q

Margin

A

“edge” so marginal changes are small adjustments around the edges of what you are doing. rational people make decisions by comparing marginal benefits and marginal costs

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14
Q

Principle 4

A

people respond to incentives

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15
Q

Incentive

A

something that induces a person to act, such as the prospect of a punishment or reward

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16
Q

Principle 5

A

trade can make everyone better off

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17
Q

Principle 6

A

markets are usually a good way to organize economic activity

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18
Q

Market economy

A

decisions of a central planner are replaced by those of millions of firms and households

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19
Q

Invisible hand

A

sellers look at the price when deciding how much to supply, and buyers look at the price when deciding how much to demand

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20
Q

Principle 7

A

governments can sometimes improve market outcomes

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21
Q

Property rights

A

individuals can own and control scarce resources

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22
Q

Market failure

A

situation in which the market does not produce an efficient allocation of resources on its own

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23
Q

Externality

A

impact of one person’s actions on the well-being of a bystander

24
Q

Market power

A

refers to the ability of a single person or firm to unduly influence market prices

25
Q

Productivity

A

amount of goods and services produced by each unit of labor

26
Q

Principle 9

A

prices rise when the government prints too much money

27
Q

Inflation

A

increase of overall level of prices in the economy

28
Q

Principle 10

A

society faces a short-run trade-off between inflation and unemployment

29
Q

Short-run effects of money growth

A

-stimulates overall level of spending and thus the demand for goods and services
-higher demand will, overtime, cause firms to raise their prices, but in the meantime, it encourages them to hire more workers and produce a larger quantity of goods/services
-more hiring means lower employment

30
Q

business cycle

A

irregular and largely unpredictable fluctuations in economic activity, as measured by the production of goods and services or the number of people employed

31
Q

Purpose of graphs

A

offer visual way to express idea that might be less clear if described with equations or words, provide powerful way of finding and interpreting patterns

32
Q

Supply and demand

A

forces that make market economies work, determining the quantity of each good produced and the price at which it is sold

33
Q

Market

A

group of buyers and sellers of a good or service. Buyers determine the demand for the product, and the sellers determine the supply of the product

34
Q

Competitive market

A

describe a market in which there are so many buyers and sellers that each has little effect on the market price

35
Q

Perfectly competitive

A

goods offered for sale are all exactly the same, and buyers/sellers are so numerous that no single buyer has any influence over the market price

36
Q

Price takers

A

since perfectly competitive, markets must accept the price the market determines

37
Q

Monopoly

A

markets with only one seller and they set the price

38
Q

Demand curve

A

relationship between price and the quantity demanded

39
Q

Quantity demanded

A

amount that buyers are willing and able to purchase

40
Q

Law of demand

A

other things being equal, when the price of a god rises, the quantity demand falls, and when the price falls, the quantity demanded rises

41
Q

Market demand

A

sum of all the individual demands for a particular good or service

42
Q

Normal good

A

demand for something falls when income falls

43
Q

Inferior good

A

demand for something rises when income falls

44
Q

Substitutes

A

when a fall in price of one good, reduces the demand for another good

45
Q

Complements

A

when a fall in the price of one good, raises the demand for another good

46
Q

Other shifts in demand curve

A

tastes, expectations, number of buyers

47
Q

Supply curve

A

relationship between price and quantity supplied

48
Q

Quantity supplied

A

amount that sellers are willing and able to sell

49
Q

Law of supply

A

relationship between price and the quantity supplied

50
Q

Shifts in supply curve

A

input prices, technology, expectations, number of sellers

51
Q

Equilibrium

A

quantity of the good that buyers are willing and able to buy exactly balances the quantity that sellers are willing and able to sell

52
Q

Surplus

A

excess supply, producers are unable to sell all they want at the going price

53
Q

Shortage

A

excess demand, consumers are unable to buy all they want at the going price

54
Q

Law of supply and demand

A

price of any good adjusts to bring the quantity supplied and the quantity demanded into balance

55
Q
A

Info Systems Quiz 1 (19 decks)

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