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Economics > Section 1-2: Basics And Concepts > Flashcards

Section 1-2: Basics And Concepts Flashcards

1
Q

Economics

A

The study of scarcity and choice

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2
Q

Economy

A

System for coordinating a society’s productive and consumptive activities

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3
Q

Market economy

A

Where the decisions are made by individual

Producers and consumers about what, how, and for whom to produce

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4
Q

Command economy

A

Gov makes decisions

Communism*

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5
Q

Incentives

A

Rewards and punishments intended for motivation

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6
Q

Property rights

A

Establish ownership

Gives individuals the right to trade goods and services

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7
Q

Marginal analysis

A

The study of the costs and benefits of doing a little bit more of an activity.
One additional unit of a good*

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8
Q

Resource

A

Any thing that can be used to produce something

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9
Q

Land

A

Natural resources
Timber
Minerals
Petroleum

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10
Q

Labor

A

Effort of workers

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11
Q

Capital

A

Manufactured goods used to make other goods

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12
Q

Entrepreneurship

A

Efforts of entrepreneurs to innovate

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13
Q

Scarce

A

A scarce resource is not available in the quantity that society wishes to use it.

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14
Q

Opportunity cost

A

What you must give up in order to get something else.

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15
Q

Microeconomics

A

The study of how people make decisions

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16
Q

Macroeconomics

A

Overall ups and downs of the economy

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17
Q

Economic aggregates

A

Summarize data across different markets

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18
Q

Positive economics

A

The branch of economic analysis that describes the way the economy actually works.

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19
Q

Normative economics

A

Makes preparations about the way the economy should work.

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20
Q

The business cycle

A

The short run alternation between recessions and expansions.

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21
Q

A Depression

A

Very deep prolonged downturn

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22
Q

Recession

A

Period of economic downturn when output and employment are falling.

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23
Q

Expansion

A

Upturn

Employment and output is rising.

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24
Q

Employment

A

Number of people employed on the economy

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25
Q

Unemployment

A

,# of ppl not employed in the economy. Actively looking for work.

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26
Q

Output

A

Quantity produced

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27
Q

Aggregate output

A

Economy’s total production for a given that time period

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28
Q

Inflation

A

Rising overall price level

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29
Q

Deflation

A

Falling overall price level

30
Q

Price stability

A

When aggregate price is changing slowly

31
Q

Economic growth

A

Increase in economy’s production

32
Q

Individual choice

A

Decisions made by individuals about what to do

33
Q

Trade off

A

Give up something to have something else

34
Q

Production possibilities curve

A

Illustrates trade offs facing an economy that only produces two goods
Shows the max quantity possible to produce of one good for each a possible q of the other.

35
Q

Efficient

A

An economy is efficient if there is no way to make anyone better off without making someone else worse off.

36
Q

Trade

A

People provide goods and services for others and receive some in return

37
Q

Gains from trade

A

People can get more of what they want from trade than if they tried to be self-sufficient.

38
Q

Specialization

A

Each person specializes in the task that her she is good at.

39
Q

Comparative advantage

A

An individual has a CA in producing a good or service if the opportunity cost of producing the gold or service is lower for that person than for others.

40
Q

Absolute advantage

A

A person has an Absolute Advantage if they can make more of a good or service given an amount of time and resources. Not the same as comparative.

41
Q

Competitive market

A

A market which there are many buyers and sellers of the SAME good or service. None of whom can influence the price at which it is sold.

42
Q

Demand schedule

A

Shows how much of a good or service consumers are able and willing to buy at different prices.

43
Q

Quantity demanded

A

The actual amount of a good and service consumers are willing to by at a specific price.

44
Q

Demand curve

A

Graphical representation of a demand schedule.

Shows relationship between quantity demanded and price.

45
Q

The law of demand

A

Says that a higher price for a good or service, all other things being equal, leads ppl to demand a smaller amount of that good or service.

46
Q

Change in demand

A

A shift in the demand curve

Which changes the quantity demanded at any given price.

47
Q

Movement along the demand curve

A

A change in the quantity demanded of a good that is the result of a change in that goods price.

48
Q

Substitutes

A

A rise in one good’s price leads to an increase in the demand for the other

49
Q

Complements

A

A rise In the price of one good leads to a decrease in the demand for the other.

50
Q

Normal good

A

When a rise in income increases the demand for a good it is a normal good.

51
Q

Inferior good

A

When a rise in income decreases the demand for a good it is an inferior good.

52
Q

Individual demand curve

A

Illustrates the relationship between quantity Demanded and price for an individual consumer.

53
Q

Quantity supplied

A

The actual amount of a good or service producers Ayer willing to sell at a certain price.

54
Q

Supply schedule

A

Shows how much of a good producers will supply at different prices.

55
Q

Supply curve

A

Shows relationship btwn Q supplied and price

56
Q

The law of supply

A

With other things being equal, the price and quantity supplied of a good are positively related.

57
Q

A change in supply

A

A shift along the supply curve which I changes the quantity supplied at any given price.

58
Q

A movement along the supply curve

A

Chance in the q supplied of a good that is a result in the goods price.

59
Q

Input

A

Anything used to produce a good and service.

60
Q

Individual supply curve

A

Shows relationship between quantity supplied and price for an individual producer.

61
Q

Equilibrium

A

When no individual would be better off doing something different

62
Q

Equilibrium price

A

The price at which the q demanded equals the q supplied.

63
Q

Surplus

A

When q supplied ^ q demanded

64
Q

Shortage

A

When q demanded ^ q supplied

65
Q

Price ceiling

A

Max price sellers are allowed to charge

66
Q

Price floor

A

Min price buyers are required to pay.

67
Q

Demand price

A

Price at which consumers will demand the good.

68
Q

The supply price

A

Price at which producers will supply that quantity

69
Q

Wedge

A

A quantity control or quota that drives a wedge between the demand price and the supply price of a good. The price paid by buyers ends up I greater Than the price received by sellers.

70
Q

Deadweight loss

A

The lost gains associated with transactions that do not occur due to market intervention

Economics (11 decks)

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