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ECON 201 - micro > Test 1 > Flashcards

Test 1 Flashcards

1
Q

Things that are produced and then used in the production of other good and services.

A

capital

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2
Q

The inputs into the process of production (another term for resources)

A

Factors of production (or factors)

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3
Q

the process that transforms scarce resources into useful goods and srvices

A

production

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4
Q

anything provided by nature or previous generations that can be used directly or indirectly to satisfy human wants

A

inputs or resources

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5
Q

goods and services of value to households

A

outputs

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6
Q

the best alternative that we give up, or forgo, when we make a choice or decision

A

opportunity cost

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7
Q

a producer has a ____ ______ over another in the production of a good or service if he or she can produce that product using few resources.

A

absolute advantage

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8
Q

a producer has a _____ _______ over another in the production of a good or service if he or she can produce that product at a lower opportunity cost.

A

comparative advantage

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9
Q

goods produced for present consumption

A

consumer goods

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10
Q

the process of using resources to produce new capital

A

investment

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11
Q

a graph that shows all the combinations of goods and services that can be produced if all of society’s resources are used efficiently.

A

Production possibility frontier (PPF)

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12
Q

The slope of the production possibility frontier (ppf)

A

Marginal rate of transformation (MRT)

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13
Q

An increase in the total output of an economy. growth occurs when a society acquires new resources or when it learns to produce more using existing resources.

A

ecnoomic growth

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14
Q

an economy in which a central gov. either directly or indirectly sets output targets, incomes, and prices.

A

command economy

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15
Q

“allow (them) to do.” An economy in which individual people and firms pursue their own self-interest without any central direction or regulation.

A

Laissez-faire economy

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16
Q

The institution through which buyers and sellers interact and engage in exchange.

A

market

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17
Q

the idea that consumers ultimately dictate what will be produced (or not produced) by choosing what to purchase (and what not to purchase)

A

consumer sovereignty

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18
Q

the freedom of individuals to start and operate private businesses in search of profits

A

free enterprise

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19
Q

the study of scarcity & how we deal with the scarcity

A

economics

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20
Q

an organization that transforms resources (inputs) into products (outputs). ___ are the primary producing units in a market economy.

A

firm

21
Q

A person who organizes, manages, and assumes the risks of a firm, taking a new idea or a new product and turning it into a successful business.

A

entrepreneur

22
Q

the consuming units in an economy

A

households

23
Q

the markets in which goods and services are exchanged

A

product or output market

24
Q

the markets in which the resources used to produce goods and services are exchanged

A

input or factor markets

25
Q

the amount (# of units) of a product that a household would buy in a given period if it could buy all it wanted at the current market price.

A

quantity demanded

26
Q

shows how much of a given product a household would be willing to buy at different prices for a given time period

A

demand schedule

27
Q

a graph illustrating how much of a given product a household would be wiling to buy at different prices.

A

demand curve

28
Q

the negative relationship between price and quantity demanded. Ceteris paribus, as price rises, quantity demanded decreases; as price falls, quantity demanded incresases

A

law of demand

29
Q

the sum of all a household’s wages, salaries, profits, interest payments, rents, and other forms of earnings in a given period of time. it is a flow measure.

A

income

30
Q

the total value of what a household owns minus what is owes. it is a stock measure.

A

wealth or new worth

31
Q

goods for which demand goes up when income is higher and for which demand goes down when income is lower.

A

normal goods

32
Q

goods that can serve as replacements for one another; when the price of one increases, demand for the other increases.

A

substitutes

33
Q

identical products (american vs. japanese cars)

A

perfect substitutes

34
Q

goods that “go together,” a decrease in the rice of one results in an increase in demand for the other and vice versa (eggs & bacon)

A

complement(s)/ary goods

35
Q

the change that takes place in a demand curve corresponding to a new relationship between quantity demanded of a good and price of that good. the shift is brought about by a change in the original conditions.

A

shift of a demand curve

36
Q

the change in quantity demanded brought about by a change in price

A

movement along a demand curve

37
Q

the sum of all the quantities of a good or service demanded per period by all the households buying in the market for that good/service

A

market demand

38
Q

the difference between revenues and costs

A

profit

39
Q

the amount of a particular product that a firm would be willing and able to offer for sale at a particular price during a given time period.

A

quantity supplied

40
Q

shows how much of a product firms will sell at alternative prices

A

supply schedule

41
Q

the positive relationship between price and quantity of a good supplied. an increase in market price will lead to an increase in quantity supplied, and a decrease in market price will lead to a decrease in quantity supplied

A

law of supply

42
Q

a graph illustrating how much of a product a firm will sell at different prices

A

supply curve

43
Q

the change in quantity supplied brought about by a change in price

A

movement along a supply curve

44
Q

the change that takes place in a supply curve corresponding to a new relationship between quantity supplied of a good and the price of a good. the shift is brought about by a change in the original conditions

A

shift of a supply curve

45
Q

the sum of all that is supplied each period by all producers of a single product

A

market supply

46
Q

the condition that exists when quantity supplied and quantity demanded are equal. at ____, there is no tendency for price to change.

A

equilibrium

47
Q

the condition that exists when Q.D. exceeds Q.S. at the current price

A

excess demand or shortage

48
Q

the condition that exists when Q.S. exceeds Q.D. at the current price.

A

excess supply or surplus

ECON 201 - micro (1 decks)

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