Module 1

Question 1

economic aggregate

Answer 1

measurements of total economy

eg: unemployment, inflation rate, GDP

Question 2

Macroeconomics

Answer 2

study of fluctuations of overall economy, role of government

Question 3

command economy

Answer 3

system with central authority making production and consumption choices
industry = publicly owned

eg soviet union

Question 4

Economy

Answer 4

system that coordinates production and consumption choices, gets what people want to them

Question 5

positive economics

Answer 5

objective analysis of how the economy actually works
discreetly right or wrong answers
ex: What if …?

Question 6

Incentives

Answer 6

rewards or punishments to motivate decisions

weakness of command economy

Question 7

Entrepreneurship / enterprize

Answer 7

risks, innovation, organization
human factors of production that take risks to combine land, labor, and capital to produce goods
Payed for be profit or loss (not wage or salary)

Question 8

Property rights

Answer 8

gives people the right to own and trade goods and services

an example of an incentive

Question 9

normative economics

Answer 9

thinking about how the world should work
ex: is this a good idea?
theoretical, subjective
policy advice, value judgement

Question 10

Opportunity cost

Answer 10

what you must give up in order to get something

the second best choice

Question 11

Labor

Answer 11

human input into production (muscle and brain) payed by wage or salary

Question 12

Capital

Answer 12

a factor of production that is man made and used to produce a good or service but doesn’t end up in the finished product

Question 13

Land

Answer 13

A factor of production
“natural resources” / “raw material”
any factor of production created by nature

Question 14

Resource

Answer 14

something that can be used to produce something else

Question 15

Factors of production

Answer 15

the economy’s resources

1) land
2) labor
3) capital
4) enterprize

Question 16

market economy

Answer 16

no one authority makes economic decisions, but rather individuals and firms

used in US

Question 17

Scarce

Answer 17

not enough to satisfy all uses

Question 18

Microeconomics

Answer 18

the study of individual decisions and their consequences

Question 19

Economics

Answer 19

the study of scarcity and choice

Question 20

human capital

Answer 20

education or skill-set that give you a competitive advantage in the job market

Question 21

economic goods

Answer 21

scarce goods, things that people want but require effort to get

Question 22

Production

Answer 22

abstract concept; either physical product or a service

Question 23

Marginal analysis

Answer 23

study of marginal costs and benefits of doing a little bit more or less of something
i.e. Is there net gain?
MB > MC?

Question 24

Margin

Answer 24

current level of activity