Test 1 Flashcards
When human wants and needs exceed the available amount, we call this
Scarcity
Economics is the study of how society, firms, and individuals manage ________ resources.
Scarce
List the 4 categories of factors of production:
Land, Labor, Capital and Entrepreneurial Ability (aka: Entrepreneurship)
The branch of economics that focuses on individual units is called _______________.
Microeconomics
The branch of economics that focuses on the whole or overall economy is called _________.
Macroeconomics
Simplified descriptions of reality used to understand the relationship between variables are called ___________________________.
Economic Models
Using opinions to validate a claim is operating in the realm of _____________ economics.
Normative
Using facts to validate a claim is operating in the realm of ____________ economics.
Positive
When two variables move or change in the same direction, they have a __________________ relationship.
Positive or Direct
When two variables move or change in opposite directions, they have a __________________ relationship.
Negative or Inverse
When you give up one alternative for another alternative, we call this concept _______________________.
Opportunity Cost
One of the central questions in economics is dealing with __________________.
Scarcity
If a line has an upward slope, we say the relationship between the two variables is ________________________or ________________.
Positive or Direct
If a line has a downward slope, we say the relationship between the two variables is
__________________ or _______________.
Negative or Inverse
Regarding the PPC model, a point inside the curve is said to be _______________.
Some type of deficiency (most often called “inefficient”)
Regarding the PPC model, a point on the curve is called a(n) ___________ point.
Efficient
Regarding the PPC model, a point outside the curve is said to be _______________.
Unattainable
The outside temperature and the number of people who go to the beach are likely to exhibit a _____________ relationship.
Direct or Positive (If Temperature goes up, # of beach goers goes up as well)
The outside temperature and the number of clothing items worn are likely to exhibit a _____________ relationship.
Inverse or Negative (If Temperature goes up, # of clothing items worn goes down)
When one variable increases and this causes another variable to increase, we say the two variables have a(n) _____________ relationship.
Direct or Positive
When one variable increases and this causes another variable to decrease, we say the two variables have a(n) ____________ relationship.
Inverse or Negative
As production gets higher, then generally speaking, a __________ standard of living exists for a nation’s residences.
Higher
List the two reasons for market failure:
Externalities and Market Power
