Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Managerial Economics > Topic 1: Intro to Economics > Flashcards

Topic 1: Intro to Economics Flashcards

1
Q

A social science concerned with using scarce resources to obtain maximum satisfaction of the unlimited material wants of society (Walstad and Bingham).

A

Economics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The study of how societies use scarce resources to produce valuable commodities and distribute them among different people (Samuelson and Nordhaus).

A

Economics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

A social science concerned with using scarce resources to obtain the maximum satisfaction of the unlimited material wants of society (McConnell and Brue).

A

Economics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

The study of how people use their limited resources to try to satisfy unlimited wants (Parkin and Bade).

A

Economics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Why study Economics?

A

➢Economics is an integral part of our everyday life and it affects our daily life.

➢Understanding economics, human beings become better informed and better equipped to analyze the human behaviour.

➢Economics allows us to intelligently and confidently debate on government policies and consequences.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Social science studies the allocation of scarce resources to satisfy unlimited human wants.

A

Economics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Economics came from the Greek word ——

A

oikonomia

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Oikonomia means

A

household management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

It means making decisions about choices.

A

Allocation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

It refers to a condition wherein most things that people want are available only in limited supply.

A

Scarcity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Common Elements of Economic Models

A
  1. Ceteris paribus assumption (other things being equal or constant).
  2. The assertion that economic agents are optimizers (they want to make the most of everything).
  3. The distinction between normative and positive economics.
    • Positive economics – explanation of economic phenomena
    • Normative economics – the application of positive economics to create policy
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Ceteris paribus assumption

A

Other things being equal or constant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

The assertion that economic agents are optimizers

A

They want to make the most of everything.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Explanation of economic phenomena

A

Positive Economics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

The application of positive economics to create policy.

A

Normative economics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Types of Economic Resources

A

-Land
-Labor
-Capital
-Entrepreneurial Ability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

One of the factors of production that include natural resources.

A

Land

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Basic factor of production which are productive services embodied in human physical effort, skill, intellectual powers, and others.

A

Labor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Refers to durable goods to produce another goods. (buildings, plant and machinery, roads, computers, ships and many more)

A

Capital

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

The ability to use the three factors of production to produce the required goods and services.

A

Entrepreneurial Ability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

2 Classifications of Economics

A

-Microeconomics
-Macroeconomics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

The study of how individual consumers and firms behave, and how the market system allocates scarce resources. It does not concern itself to the temporary fluctuations in the economy.

A

Microeconomics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Studies the economy as a whole. It seeks to explain why fluctuations happen and then investigate policies that can mitigate them. It studies three essential phenomena of the economy: growth of output, employment, and inflation. All of which rely on the interactions of the goods, labor, and assets markets of the economy.

A

Macroeconomics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Studies the economy as a whole. It seeks to explain why fluctuations happen and then investigate policies that can mitigate them. It studies three essential phenomena of the economy: growth of output, employment, and inflation. All of which rely on the interactions of the goods, labor, and assets markets of the economy.

A

Macroeconomics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

8 Economic Goals

A

-Economic Growth
-Full employment
-Economic Efficiency
-Price level stability
-Economic Freedom
-An equitable distribution of income
-Economic Security
-Balance of trade

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

High standard of living translated which is translated into the production of more and better quality of goods and services.

A

Economic Growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

There must be an available job for individuals who are willing and able to work.

A

Full Employment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Makes use of the resources to maximize the benefit for the society.

A

Economic Efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

It able to avoid huge price fluctuation.

A

Price level stability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Freedom to do what economic activity to do.

A

Economic Freedom

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

How people make decisions.

A

• People face tradeoffs.
• The cost of something is what you give up to get it.
• Rational people think at the margin.
• People respond to incentives.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

How people interact with each other.

A

• Trade can make everyone better off.
• Markets are usually a good way to organize economic activity.
• Governments can sometimes improve economic outcomes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

The forces and trends that affect how the economy as a whole works.

A

• The standard of living depends on a country’s production.
• Prices rise when the government prints too much money.
• Society faces a short-run tradeoff between inflation and unemployment.

34
Q

The standard of living depends on

A

Country’s production

35
Q

Prices rise when

A

The government prints too much money

36
Q

Society faces a short-run tradeoff between

A

Inflation and Unemployment

37
Q

The cost of something is

A

What you give up to get it

38
Q

Rational people think

A

At the margin

39
Q

People respond to

A

Incentives

40
Q

People face

A

Tradeoffs

41
Q

It can make everyone better off.

A

Trade

42
Q

Usually a good way to organize economic activity.

A

Markets

43
Q

—— can sometimes improve economic outcomes

A

Governments

44
Q

Ten Principles of Economics

A
  1. People Face Tradeoffs
  2. The Cost of Something Is What You Give Up to Get It
  3. Rational People Think at the Margin
  4. People Respond to Incentives
  5. Trade Can Make Everyone Better Off
  6. Markets Are Usually a Good Way to Organize Economic Activity
  7. Governments Can Sometimes Improve Market Outcomes
  8. The Standard of Living
    Depends on a Country’s Production
  9. Prices Rise When the Government Prints Too Much Money
  10. Society Faces a Short-run Tradeoff Between Inflation and Unemployment.
45
Q

Principle: To get one thing, we usually have to give up another thing.

Food v. clothing
Leisure time v. work
Sleeping v. attending school
Efficiency v. equity

A

People Face Tradeoffs

46
Q

It means society gets the most that it can from its scarce resources.

A

Efficiency

47
Q

It means the benefits of those resources are distributed fairly among the members of society.

A

Equity

48
Q

Principle: Decisions require comparing costs and benefits of alternatives.

Whether to go to college or to work?
Whether to study or go out on a date?
Whether to go to class or sleep in?

A

The Cost of Something Is What You Give Up to Get It.

49
Q

The __________ of an item is what you give up to obtain that item.

A

Opportunity Cost

50
Q

Principle: Making decisions requires trading off one goal against another.

A

People Face Tradeoffs

51
Q

____________ are small, incremental adjustments to an existing plan of action.

A

Marginal Changes

52
Q

Principle: People make decisions by comparing costs and benefits at the margin.

A

Rational People Think at the Margin.

53
Q

Principle: Marginal changes in costs or benefits motivate people to respond.

A

People Respond to Incentives

54
Q

Principle: The decision to choose one alternative over another occurs when that alternative’s marginal benefits exceed its marginal costs!

A

People Respond to Incentives

55
Q

Principle: People gain from their ability to trade with one another.

A

Trade Can Make Everyone Better Off

56
Q

Principle: Competition results in gains from trading. Trade allows people to specialize in what they do best.

A

Trade Can Make Everyone Better Off

57
Q

A _____________ is an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.

A

Market Economy

58
Q

Principle: Adam Smith made the observation that households and firms interacting in markets act as if guided by an “invisible hand.”

A

Markets Are Usually a Good Way to Organize Economic Activity

59
Q

Principle: Because households and firms look at prices when deciding what to buy and sell, they unknowingly take into account the social costs of their actions. As a result, prices guide decision makers to reach outcomes that tend to maximize the welfare of society as a whole.

A

Markets Are Usually a Good Way to Organize Economic Activity

60
Q

______ occurs when the market fails to allocate resources efficiently.

A

Market Failure

61
Q

Principle: When the market fails (breaks down) government can intervene to promote efficiency and equity.

A

Governments Can Sometimes Improve Market Outcomes

62
Q

Standard of living may be measured in different ways:

A

-By comparing personal incomes.
-By comparing the total market value of a nation’s production.

62
Q

Market failure may be caused by an _________ which is the impact of one person or firm’s actions on the well-being of a bystander.

A

Externality

62
Q

Market failure may be caused by__________ which is the ability of a single person or firm to unduly influence market prices.

A

Market Power

62
Q

Principle: Almost all variations in living standards are explained by differences in countries’ productivities.

A

The Standard of Living Depends on a Country’s Production.

62
Q

Principle: One cause of inflation is the growth in the quantity of money. When the government creates large quantities of money, the value of the money falls.

A

Prices Rise When the Government Prints Too Much Money

62
Q

________ is an increase in the overall level of prices in the economy.

A

Inflation

62
Q

The _________ is an economic theory that inflation and unemployment have a stable and inverse relationship.

A

Phillips curve

63
Q

___________ is the amount of goods and services produced from each hour of a worker’s time.

A

Productivity

64
Q

Principle: The inflation in the economy and the unemployment rate faces a trade-off over the short-run period as discussed by the SRPC (short-run Phillips curve). According to SPRC, when the inflation in the economy increases, it experiences a decline in the unemployment rate, and when the unemployment rate increases, the economy experiences a decrease in the inflation rate.

A

Society Faces a Short-run Tradeoff Between Inflation and Unemployment

65
Q

When individuals make decisions, they face ________ among alternative goals.

A

Tradeoffs

66
Q

Rational people make decisions by comparing

A

Marginal costs and marginal benefits

67
Q

People change their behavior in response to the ________ they face.

A

Incentives

68
Q

_______ can be mutually beneficial

A

Trade

69
Q

_________ are usually a good way of coordinating trade among people

A

Markets

70
Q

It can potentially improve market outcomes if there is some market failure or if the market outcome is inequitable.

A

Government

71
Q

The ultimate source of living standards

A

Productivity

72
Q

The ultimate source of inflation

A

Money Growth

73
Q

3 Essential Phenomena of the Economy

A

Output
Employment
Inflation

74
Q

3 Essential Phenomena of the Economy

A

Output
Employment
Inflation

Managerial Economics (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions