OJA 1 - Basic Concepts in Economics Flashcards

Question

How is it produced?

Answer 1

By Economic sectors, by technology, local or imported, enviromental concerns

Answer 2

Economic subjects, users, consumers, at home or abroad

Answer 3

Households (individuals), firms (businesses), state/government (country)

Answer 4

It studies behaviour of a national or regional economy as a whole - on a national level Explains the economic reality in aggregates - in totals

Answer 5

It studies the behaviour of subject of smaller size than the state, studies how households & companies behave in terms of production and consumption, sale and purchase, etc.

Answer 6

* Economics = social science that studies human behaviour * Economy = a complex of applied economic activities related to the production, exchange and consumption of goods and services within a country or area

Answer 7

1) type of production (production, service sector) 2) ownership (public, private, voluntary sector) 3) stage in production (primary, secondary, tertiary, quaternary)

Answer 8

These are all the materials available in our environment which help us to satisfy our wants and needs

Answer 9

1) LAND (e.g. natural resources, soil) 2) LABOUR (work of people) 3) CAPITAL (financial assets - goods, money, buildings) 4) ENTREPRENEURSHIP (risk-taking, organizing and biding all other factors together for profit)

Answer 10

It depends on the economic system of a country: • when it is a market economy, it is owned by private owners and • if it is a command economy it is owned by the state and is responsible for what is to be produced

Answer 11

The results that reward you for your work (e.g. money)

Answer 12

It is the inability to make a decision due to over-thinking problem - having too much data makes it difficult for us to pick one

Answer 13

It is additional satisfaction that comes from consuming an additional unit of a good/service.

Answer 14

It is analyzing the benefits of one additional unit vs. the costs of that unit (e.g. in production, consumption)

Answer 15

That means when the consumption of units increases, the marginal utility decreases (the satisfaction is smaller) e.g. when I am hungry the first bite of pizza feels good, I derive very high utility from it, however, with the fourth bite the utility gesta lower because I am not that hungry anymore. A consumer may be willing to pay more for the first bite of pizza than fort the second or third due to the decreased utility from it.

Answer 16

It is a cost that has already been incurred and cannot be recovered e.g. A company invests in a project but the results don’t appear and the company keeps the project alive with hopes and it costs them more money - instead, they should have closed on the project.

Answer 17

It describes the emotional difficulty of deciding whether to proceed or abandon a project when time and money have already been spent, but the desired results have not been achieved.

Answer 18

It happens when a company continue a behaviour or endeavour as a result of previously invested resouces (time, money, effort) A company is likely to keep investing into a project because they have already spent some money on it, even though continuing is not the best idea

Answer 19

* These are cost advantages gained by companies when production becomes efficient * They can achieve economies of scale by increasing production and lowering costs - costs are spread over a large number of goods e.g. bulk orders, selling 1000 T-shirts a month