Test 1 (Chapters 1-3) Flashcards
Economics
The study of the choices that individuals make and societies make in the production, distribution, and consumption of goods.
Economy
Any system for the production, distribution, and consumption of goods and services
What was wrong with the Pilgrim’s system?
Some people refused to work
Economists
Scholars of the PDC ( production distribution and consumption ) of goods within an economy
Macroeconomics
The study of national and international economies and how these major economies are affected by large-scale choices and public policies
Microeconomics ( Greek for small )
The study of specific components within a major economy and how the choices made by individuals, households, and business affect that economy.
Economic models
Models that show the relationships among the various components of an economy
Economic forecast
Something to help people that make decisions, make wise choices
Good
A tangible item that people want and for which they will pay
Services
Intangible goods produced by labor for which people expect to pay
Want
The human desire to have and use a certain good
Market
A mechanism that allows people to exchange goods
Mass market
Very large number who want a large quantity of a product
Supply
The quantity of a good for sale at a certain price under certain conditions, or the amount of a good that’s produced
Demand
The amount of a good that is bought at a certain price under certain conditions
The thing you gotta understand about economics
All goods have to be worked for
Producers
Providers
Consumers
Users
Prodigality
An old word for the bad habit of spending
More than you can afford
Need
Necessity, something that would be difficult to live without
Want
Desire, a longing, an appetite for something
Capital or investment good
Anything used in the production and distribution of goods and services
Consumer goods
Things produced for direct use by consumers
Value
The worth that consumers attach to iTunes
Utility
Usefulness
Scarcity
Limited availability
Who decides the price for a good?
The consumer
Who is the founder of the Austrian school of economics?
Carl Menger
What does the diamond-water paradox say?
Rare items such as diamonds normal command high prices while necessities such as water usually command low prices. Since diamonds are scarce, they are worth more. But a person who is dying of thirst would pay a lot more for water
What are the factors of production?
Natural Resources
Labor
Capital
Entrepreneurship
What economic system is based on traditions, heredity or caste?
traditional economy
What economic system is controlled by a centralized authority?
commanded economy
What in economic system are the people free to make their own economic choices?
Free enterprise
What is a economy called that has several different economic systems?
Mixed economy
T or F Are all nations one type of economic system?
False. no nation has one they all have a mixture of a couple different economic systems
What is the first factor of production?
Natural Resources (includes and and other raw material)
What term refers to work that contributes to the production of goods?
Labor
What economic system barely provides enough for the society to survive?
Subsistence economy
In what type of capitalistic system is most of the nations capital owned privately?
Private capitalism
In what type of capitalistic system is most of the nations capital owned and ran by the state?
State capital
What is considered the intelligent direction and supervision of natural and human economic resources?
Entrepreneurship
What is the name of a person who takes risks in theintelligent direction and supervision of natural and human economic resources on a bold scale?
Entrepreneur
Who is considered one of the early captains of industry?
Du Pont
