The Nature Of Economics Flashcards
What is economics?
Econmics is the study of the Econmic problem know as scarcity, it fouces on using scare resources in the most effient manner to satisfy needs and wants.
What are the two branches of economic?
Micro and macro economics
What is micro economics ?
The study of the behavior, decision and choices of economic agents
What is macro económics?
The behavior of an economy as a whole
What are the 3 economic agents?
Firms
Households
Government
What is the role of firms?
To provided goods and services
What is the role of households?
They are owners of the factors of production and is also consumers
What is the role of the government?
To provide rules and regulations for the agents
What is opportunity cost?
The next best alternative for gone
Or
What is given up when a choice is made
What is money cost?
What is paid to produce a good or service
What is choice?
A range of options
What is a free good?
One that occurs naturally
What is an Economic good?
One which is produced using scarce resources?
What is input?
Resources used to create goods and services
Define Output
The quantity of goods or services produced in a given time period
What are the 4 basic needs?
Food
Shelter
Clothing
Air
Water
This is where wants are unlimited and resources are Limited, what is this called?
Scarcity
What is a PPC, production possibility curve?
This is a graph showing the combination of 2 goods than an economy is able to produce.
There are 3 assumptions of the PPC, give 1?
The economy only produces 2 goods
The statement (the amount of resources are fixed) is an?
Assumptions of the PPC
There are 3 types of opportunity cost or PPCs what are they?
Increasing
Decreasing
Constant
This is an example of which PPC?
An equal amount of good or units must be given up
Constant
This is an example of which PPC?
To produce more and more of one good ,less and less of the other good must be given up
Decreasing
This is an example of which PPC?
To produce more and more of one good ,more and more of the other good must be given up
Increasing
If a point is over the boundary of the PPC it is known as?
Unattainable
If a point in below the bonudary of the PPC it is?
Inefficient but attainable
Economic growth
Discovery of new natural resources
Growth in population
Technological progress
Improvement in labour productivity
These are factors that cause the ppc to move………………………….?
Outward
