UNIT 1: Intro to Economics and Microeconomics Flashcards
Microeconomics
Focuses on individual decision-making units and how they interact.
Macroeconomics
explore the economy as a whole
Scarcity
Fixed (or limited) amount of goods and services available
Traditional economy
economic system in which traditions, customs, and beliefs shape the outcome of the economy.
Market economy
economic system in which supply and demand determine what goods and services are produced.
Command economy
economic system where the government controls productions and economic activity.
Mixed economy
an economy that holds characteristics of both command and market economies. (Supply and demand are determined by the people as long as they meet govt. goals)
Opportunity cost
Cost of choosing what you give up by choosing one option.
Goods
Objects that can fulfill human wants/needs, provide utility.
Services
Economic activity that is intangible; provides utility but cannot be stored.
Endowment
natural and human resources; all human resources must be produced
Utility
Satisfaction; economics assume maximum this drives individual choices
Profit motive
tendency that leads to monetary gain in people
Consumer sovereignty
the economic power of the individual in a free market
Government regulation
requirements government places on private firms and individual for their goals
Marginal utility
additional increment of utility associated with consuming one more unit of a good or service.
Margin
a succession of units, the specific unit you are focusing on
Total utility
the total satisfaction from consuming a specific quantity of goods or services.
Satiate
Satisfy
Initial decision
over simplified decision-making process based on units.
Bliss point
maximization of utility
Marginal analysis
evaluating the impact of one additional unit
Util
a measure of utility
Diminishing marginal productivity
initially, one input increases the initial successive units of information toward the output, but eventually, this will add to less output
