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Econ 102 > Midterm 1 terms and rukes > Flashcards

Midterm 1 terms and rukes Flashcards

1
Q

What is economics?

A

The social science that studies trade and production.

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2
Q

spontaneous order?

A

Order that is the product if human action, but not human design.

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3
Q

What is a price system?

A

A network of interrelated prices of goods and services.

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4
Q

What is a Positive analysis?

A

An attempt to describe how the world is. (Fact)

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5
Q

What is Normative analysis?

A

Analysis that describes a value judgment. (Bias)

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6
Q

What is a theory?

A

An abstract explanation of some phenomenon.

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7
Q

What is a society?

A

A group of people who have moral, political, or economical relationships with each other.

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8
Q

What is a market economy?

A

A social system where resources are privately owned and controlled.

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9
Q

What is property right?

A

A moral na legal right to control a resource and to exclude others from using it. (laid-faire)

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10
Q

What is a command Economy?

A

A social system in which resources are collectively owned or controlled. (communism)

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11
Q

What is a mixed economy?

A

A social system in which some resources are privately owned and controlled and some are owned or controlled by the government. ( a mix of command economy and market economy)

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12
Q

What is Scarcity?

A

the amount of goods available is not sufficient to satisfy all human desires.

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13
Q

What is “Unlimted desires”

A

No matter what ones current circumstance, it is always possible to imagine and achieve a more desirable state of affairs.

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14
Q

Who is a Methodological individualism?

A

The principle that the individual human being I the basic unit of research in the social sciences.

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15
Q

What is rational choice?

A

People pursue their personal values.

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16
Q

What is the exchange of equivalent goods?

A

The theory that people exchange one good for another when both parties value the good equally.

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17
Q

What is just a price theory?

A

The theory that there is a single just price at which each good should be sold.

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18
Q

What did mercantilists believe in?

A

Social order requires government planning, Money constitutes real wealth for a nation.

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19
Q

What are the four starting point of economics?

A

1.scarcity
2. Unlimited desires
3. Methodologies individualism
4. Rational choice

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20
Q

What is the exchange of equivalent?

A

The theory that people exchange one good for another when both parties value the goods equally.

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21
Q

what is Just a price theory?

A

The theory that there is a single just price at which each good should be sold for.

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22
Q

what is the nominal value of money?

A

The face value of a certain amount of money.

23
Q

What is the Real value of money?

A

The goods and services that can be purchased with a certain amount of money.

24
Q

What is a zero-sum game.

A

A system in which for one party to gain, another has to loss.

25
Q

What is a mutually Beneficial exchange?

A

An exchange that benefits both parties.

26
Q

Who was Adam Smith?

A

The founder of economic sciences. (1723-1790)

27
Q

What deos the invisible hand refer to?

A

Adam Smiths metaphor for the power of the invisible self-interest to create spontaneous order.

28
Q

What is utility?

A

Usefulness in satisfying human desire .

29
Q

What was the subjective theory of price?

A

The theory that the price of a good is determined by its utility.

30
Q

What is the water- diamond paradox?

A

Water is very useful but has a low price, while a diamond is not very useful but still has a high price.

31
Q

What is the theory of value?

A

The theory that the price of a good is determined by its cost of production.

32
Q

what was the marginal revolution?

A

The discovery of the theory of marginal utility in the early 1870’s

33
Q

what is a consumer good?

A

a good that serves our desires directly.

34
Q

what is a producer good?

A

a good that is used in the production of another good.

35
Q

what is the theory of derived demand?

A

The value of goods of higher order is. derived from that of the corresponding goods of lower order.

36
Q

marginal

A

at the edge

37
Q

what is a marginal unit

A

the next unit gained or given up

38
Q

What is Marginal utility.

A

The additional utility that a person gets from having one more unit of a good or loses from having one less unit of a good.

39
Q

what is the theory of marginal utility?

A

The theory that the price of a good is determined be its marginal utility.

40
Q

What is Ordinal ranking?

A

A list in order of preference

41
Q

What is opportunity cost?

A

The best alternative given up when making a choice.

42
Q

What is diminishing marginal utility?

A

As a person acquires more units of a good, the satisfaction they derive from each new unit is lower than the previous unit.

43
Q

What is increasing marginal opportunity cost?

A

As a person gives up more units of a good, the satisfaction they give up with each new unit is higher than the previous unit.

44
Q

What is the range of indeterminacy

A

The range of potential prices.

45
Q

What is the Market clearing price?

A

A price at which anyone who wants to buy or sell can find a willing trade partner.

46
Q

what is quantity demanded?

A

The amount of a good a person is willing and able to buy at a particular price.

47
Q

What is the demand curve?

A

The curve that shows the relationship between the price of a. good and the quantity demanded.

48
Q

What is the law of demand?

A

There is a negative relationship between the price of a good and the quantity demanded.

49
Q

What does ceteris paribus mean?

A

Holding all other variables constant

50
Q

what is the quantity supplied?

A

The amount of a good a person is willing and able to sell at a particular price.

51
Q

What the the supply curve

A

The curve that shows the relationship between the price of a good and the quantity supplied.

52
Q

What is the law of supply?

A

The law of supply is the positive relationship between the price and the quantity supplied.

53
Q

What is the market clearing price.

A

A price where the quantity demanded and quantity supplied are equal.

54
Q

what is the market clearing quantity.

A

The number of exchanges that take place at a market clearing price.

Econ 102 (2 decks)

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