Topic 1 Flashcards
What is economics
the study of how we allocate limited resources to satisfy the needs and wants
Limited recourses are
land, labour, capital, enterprise
Unlimited wants are
buildings, defense, agriculture, luxuries, markets
mirco versus macro
micro is individual macro is whole sectors
10 principles
trade off, opportunity cost, rational people think at the margin, incentives, trade can make everyone better of, markets are good way to organize economic activity, gov’t can improve market outcomes, countries standard of living depends on ability to produce goods and services, gov’t prints too much money – all prices rise, society faces short run trade off between inflation and employment
efficiency vs equity
efficiency is max benefit from scarce resource. Equity means benefits are distributed to public
market economy
capitalism
centrally planed economy
socialist economy
mixed economy
buyers and sellers play significant role (canada)
economics is the study of
choices
how do incentives affect behaviour
something that induces people to act
what is scarcity
a situation in which unlimited wants succeed the limited resources available to provide those wants
explicit vs implicit
explicit is the monetary for use of a resource owned by someone else
Implicit cost is the foregone opportunity cost to the owner of the resource
how does the govt help the market
enforce property rights
promote efficiency
promote equity
