SOCIAL STUDIES Flashcards
What is economics?
Is the study of efficient allocation of available resources.
Branch of economics that deals
with the study of individuals,
households and businesses.
microeconomics
The study of the aggregate or
much bigger scale than what
is covered in
microeconomics, such as the
national or global economics.
Macroeconomics
Developed during the
late 18th to 19th century
Advocated by Adam Smith,
David Ricardo, Jean-Baptiste
Say, Thomas Malthus and
Stuart Mill.
classical economics
(1723-1790) was a Scottish
political economist and the
lead advocate of classical
economics.
adam smith
According to Smith markets are
believed to be self-regulating
and work best if there is no or
minimal government
intervention.
Theory of free market system
States that the value of
a good is determined
by the cost of
production.
Theory of value
According to Jean-Baptiste
Say which proposes that
supply creates its own
demand.
Law of markets
Based on the ideas of John
Maynard Keynes (1883-
1946)
keynesian economics
Keynes proposed that economic output is driven by
aggregate demand.
The government should have active role in the
management of the economy.
keynesian economics
Developed during the 19th century.
Neoclassical approach is centered on microeconomics.
neoclassical economics
Firms are naturally
profit maximizing.
Theory of the firm
Claims that collective individual
decisions drive the aggregate social
behavior.
Rational choice theory
what are the four factors of production?
land, labor, entrepeneurship, capital
Is the result of the interaction between demand
and supply in the market.
shortage
Used to explain the idea that economic resources
are limited.
scarcity
Products of nature or
naturally occurring in the
environment.
Examples: forest, air, bodies
of water and minerals
natural resources
Based on the assumption of..
The supply of land is fixed
The quality is the same in every area of the land
theory of rent
Came up with the theory of
rent.
Rent defined as the return on
the use of land.
David Ricardo
Those resources get
replenished and appear to
be constantly available.
Examples: air, wind, water,
sunlight
renewable resources
Those do not replenish
naturally or take an
extremely long time to do so.
nonrenewable resources
Refers to the price per unit of input.
Unit Cost
Where the price of the good is
driven by its relatively limited
supply
scarcity value
are the goods that
are critical for survival.
◦ Examples: water, food,
shelter and air the
absence of which will
lead to one’s demise.
needs
