Unit 1 Flashcards
What is Econ?
The study of behaviour and incentives
What are incentives?
Described as a reward that encourages an action
What do incentives do?
They encourage people to work harder, be more productive, and make certain choices
What is microeconomics?
The study of choices that individuals and businesses makes, the way these choices interact in markets, and the influence of governments
What is an example of microeconomics?
How producers decide what they want to produce, how to price, and when to exit markets
What is macroeconomics?
Studies the economy as a whole, including factors like GDP - how much stuff we made as a country in a given year
What is an example of macroeconomics?
How many cars are produced in a country, how much people spend on toys, or how government decisions impact jobs and prices
What is scarcity?
Having a limited supply of resources to meet the needs and wants of society
What are goods and services?
Objects that people value and produce to satisfy wants
What are the four factors of production?
Land, labor, capital, entrepreneurship
- Land
Includes things we get from nature like soil, agriculture, etc
- Labor
People who work to make things happen, like farmers
- Capital
Tools and machines we use to make stuff, like tractors on farms or sewing machines in factories
- Entreprenuership
This is when someone comes up w/ ideas, takes risks to make stuff happen, like starting a business
People who own land get money called…
Rent
People who work get money called ‘blank’ for their time and effort
Wages
If someone owns tools or machines used in production, and they let others use them…
Interest
People who are entrepreneurs get money called…
Profit
What is a choice?
Every decision means picking one thing and giving up another, while weighing the pros and cons
What is an opportunity cost?
What you sacrifice by choosing one option over the other. Basically choosing the next best option
What is a rational choice?
People usually make choices that they think will benefit them the most, based on what they know
What is marginal?
Focusing on the smaller, incremental changes of something. Cost of making one more item
What is marginal benefit?
The benefit from consuming or producing one more unit of a good service
What is marginal cost?
The extra cost of making or using one more unit of something
