Unit 1 - Economics 101 Flashcards
A commodity accepted by general consent as a medium of economic exchange.
- Money
A social science that seeks to analyze and describe the production, distribution, and consumption of wealth.
- Economics
Examines human behavior and habits ((social)) and also because conclusions are data-backed, and economists follow the scientific method.
- Social Science
Exists when people do not have all the things they want.
- Scarcity
A choice between one thing or another.
- Trade-off
What you give up in a trade-off.
- Opportunity Cost
Means considering how much you value the addition of something.
- Marginal Thinking
What you earn from your choice.
- Marginal Benefit
What it costs to gain the marginal benefit.
- Marginal Cost
A small difference from a normal decision.
- Marginal Change
A benefit added to a choice in the main decision.
- Incentives
A side effect that affects other people, is not reflected in the cost of a good or service and can be positive or negative.
- Externalities
The ability of a company (or companies) to raise a price above normal. When a company has all the market power in an industry.
- Monopolies
Happens when prices rise outside of demand.
- Inflation
Refers to how easy, safe, and healthy people are.
- Standard of Living
The money rises in value, and although technically prices should go down in the market, they typically don’t right away.
- Deflation
Describes rapid, excessive, and out-of-control general price increases in an economy.
- Hyperinflation
Referring to individuals who are employable and actively seeking a job but are unable to find a job.
- Unemployment
A supposed inverse relationship between the level of unemployment and the rate of inflation.
- Philips Curve
Unseen forces that move the free market economy. Through individual self-interest and freedom of production and consumption, the best interest of society, as a whole, are fulfilled.
- Invisible Hand
A measure of how efficiently goods and services are produced.
- Productivity
Occurs when a market does not allocate resources efficiently on its own, leading to a loss of economic and social welfare.
- Market Failures
Places or systems where buyers and sellers come together to exchange goods and services.
- Markets
Refers to the exchange of goods and services between individuals, businesses, or countries.
- Trade
