Module 1: The Study Of Economics Flashcards
Economics
The study of scarcity and choice
Individual choice
The decision by individuals about what to do, which necessarily involve decisions about what not to do
Economy
A system for coordinating a society’s productive and consumptive activities
Market economy
The decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement in the decisions
Command economy
Industry is publicly owned in the central authority makes production and consumption decisions
Incentives
Rewards or punishments that motivate particular choice
Property rights
Establish ownership and grant individuals the right to trade goods and services with each other
Marginal analysis
The study of the costs And benefits of doing a little bit more of an activity versus a little bit less
Resource
Anything that can be used to produce something else
Land
All resources that come from nature, such as minerals, timber and petroleum
Labor
The effort of workers
Capital
Manufactured goods used to make other goods and services
Entrepreneurship
The effort of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes
Scarce
Resources are not available insufficient quantities to satisfy all the various ways of society wants to use it
Opportunity cost
What you must give up in order to get it
