Unit 1 Flashcards

1
Q

Needs

A

Basic requirement for survival

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2
Q

Wants

A

Something we would like to have but not needed for survival

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3
Q

Scarcity

A

Unlimited wants and needs vs limited resources

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4
Q

Opportunity cost

A

Sacrificing one thing for another (guns or butters)

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5
Q

Economics

A

The study of scarcity, choice, and opportunity cost

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6
Q

Factors of production

A

Resources used to produce all goods and services

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7
Q

Capital

A

Good used to produce other goods and services (tools,machines)

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8
Q

Entrepreneurship

A

Person who takes a risk to produce goods and services

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9
Q

Land

A

Natural resources aka “gift of nature”

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10
Q

Labor

A

Human efforts to produce goods

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11
Q

Human capital

A

Skilled and knowledge of labor (more skilled= more value and productivity)

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12
Q

Traditional economies

A

Produce products using historical methods

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13
Q

Command economies

A

Set quotas to achieve production

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14
Q

Market economies

A

Are typically efficient and defined by private property rights

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15
Q

PPC

A

Graphs that show combination of 2 goods an economy can produce with fixed resources

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16
Q

Productive efficiency

A

Getting the most out of resources

17
Q

Capital goods

A

Used for production

18
Q

Consumer goods

A

Used for consumption

19
Q

Absolute advantage

A

Ability to produce more of products with fixed resources or produce product with fewer resources

20
Q

Comparative advantage

A

Ability to produce with lower opportunity cost

21
Q

Terms of trade

A

Rate at which 1 good can be trade for another

22
Q

Output

A

Quantity of finished product

23
Q

Input

A

Factor of production needed to make the product

24
Q

Cost benefit analysis

A

Compares costs to benefits to arrive to a decision

25
Marginal analysis
Comparing changes in marginal benefit and costs
26
Marginal benefit
Change in total benefit over change in quantity
27
Marginal cost
Change in total cost over change in quantity
28
Marginal utility per dollar
Calculation of a value to price ratio for the consumption of an additional unit of a product Formula: mu/p
29
Utility maximization
Occurs when consumer adjusts spending to maximize total utility within income limitation Formula: mu good x/ $p good x = mu good y/ $p good y