Unit 1: intro to economics and microeconomics

Question 1

Focuses on individual decision-making units and how they interact

Answer 1

Microeconomics

Question 2

Explores the economy as a whole

Answer 2

Macroeconomics

Question 3

The fixed amount of goods or services available

Answer 3

Scarcity

Question 4

An economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rule and manner of their distribution also referred to as a subsistence economy, a traditional economy is defined by bartering and trading

Answer 4

Traditional economy

Question 5

An economic system in which the means of production are publicly owned and economic activity is directed by a central government or portion of the government

Answer 5

Command economy

Question 6

An economic system in which the forces of supply and demand determine what goods and services are produced

Answer 6

Market economy

Question 7

An economy which practiced characteristics of both command and market economies; supply and demand largely influence the economy, but there is government intervention to meet certain economic goals

Answer 7

Mixed economy

Question 8

The cost of choosing; what you give up by choosing one option

Answer 8

Opportunity cost

Question 9

objects that can fulfill human wants/needs, provide utility

Answer 9

Goods

Question 10

economic activity that is intangible; provides utility, but cannot be stored

Answer 10

Services

Question 11

natural and human resources from which all goods and services must be produced

Answer 11

Endowment

Question 12

satisfaction; economists assume maximizing this drives individual choice; measured in utils

Answer 12

Utility

Question 13

the tendency of people to engage in activities that will lead to monetary gain

Answer 13

Profit motive

Question 14

the economic power of the individual in a free market

Answer 14

Consumer sovereignty

Question 15

requirements the government places on private firms and individuals to achieve the government’s goals

Answer 15

Government regulation

Question 16

Freedom 
Security 
Equity 
Growth 
Efficiency 
Stability

Answer 16

Social & economic goals

Question 17

additional increment of utility associated with consuming one more unit of a good or service

Answer 17

Marginal utility

Question 18

in a succession of units, the specific unit you are focusing on

Answer 18

Margin

Question 19

the total satisfaction derived from consuming a specific quantity of a good or service; the total of marginal utilities for all individual units consumed

Answer 19

Total utility

Question 20

Satisfy

Answer 20

Satiate

Question 21

over-simplified decision-making process based on utility (consume until marginal utility =0)

Answer 21

Initial decision

Question 22

maximization of utility

Answer 22

Bliss point

Question 23

evaluating the impact of one additional unit

Answer 23

Marginal analysis

Question 24

a measure of utility (this is an abstract concept)

Answer 24

Util

Question 25

initially, one input increases the initial successive units of input toward the output, but eventually this will add to less output

Answer 25

Diminishing marginal productivity

Question 26

maximizing utility in light of scarcity

Answer 26

Balancing at the margin

Question 27

utility diminishes the further in the future that utility is realized

Answer 27

Discounting the future