Unit 1: Economic Theory Flashcards
goods that are made to last
durable
goods ready for consumption (in other words the final good)
consumer good
the effect one economic variable has on the other provided all other variables remain the same
ceteris paribus
Adam Smith’s name for the regulating impact of supply and demand on free markets
the invisible hand
Karl Marx’s name for the underclass workers who were kept from the means of production
proletariat
the vast differences in price of certain essential goods and non-essential goods (ex. diamonds being more valuable than water)
paradox of value
invention that allowed for the building of video games and our modern tech
microprocessor
the accumulation of valuable goods
wealth
market that is composed of free market choices and also government planning to prevent negative costs like pollution and monopolies
mixed market
a tangible product made for capital or consumption
good
what a person gained by making a tradeoff
benefit
the 4 factors of production
land, labor, capital, and entrepreneurship
symbol of economic downturn for Atari
E. T.
a use of resources that cannot be done in the face of scarcity
impossible
goods created through central planning and tax spending; roads, schools, parks, etc.
public goods
a time when humans are faced with solving economic questions to a lack fo resources
scarcity
good/philosophical property supported by Adam Smith but hated by Marx
private goods
the study of choices made in scarcity
economics
an economic activity that produces human capital like policing, firefighting, and teaching
service
central location of economic decisions, investment, and entrepreneurship on the circular flow model
business
a graph that shows the possible outcomes of trade offs
production possibilities frontier (PPF)
something you desire, but could live without
want
strong component of Adam Smith’s philosophies that Marx attempted to eliminate
competition
Karl Marx’s name for the wealthy who control the means of production
bourgeoisie
Adam Smith’s market of limited government and competition
free market
Adam Smith’s belief that government has a limited role in the economy
laissez faire
something that is vital to survival
need
what a person lost by giving up the other tradeoff
opportunity costs
a possible use of resources, but in an underperforming way
inefficient
the choices people make in times of scarcity
tradeoffs
supplier of labor, demander of consumer goods
household
the best use of resources in tradeoffs
efficient
Karl Marx’s economic system where all decisions are made through central planning
command system
goods used to make final goods
capital goods
the worth of a good or service in dollars and cents
value
a short term good
nondurable good
the usefulness of an economic product
utility
