Unit 1 Test Flashcards
Economics
The study of security and choice
Labour Market
Strong right now which is bad for companies
An Economy
A place to measure GDP (How many jobs and services are produced)
Deflation
Rise in the value of currency and fall in the price level
Two Worst Decades
30s (Deflation) 70s (Bad inflation and unemployment)
Interest Rate
The cost of making money
Treasury (Debt Instrument)
Bond, lending money to the government, fixed rate
Raising Minimum Wage
you can only get skilled workers so it takes away jobs
Commodity
An interchangeable good (wheat, copper, labour)
Agricultural Revolution
10000 BCE, started using land so land is where all value is
Commercial Revolution
1100 AD or 1492, commerce/ trade allows you not to work, Sea makes you powerful
Industrial Rev
1776, First industrialized countries powerful (Britain, France, Italy, US, Japan)
Technology Revolution
Started here
Laws of Market
Outcome of certain behavior in certain social framework being definite and foreseeable results
Traditional System
No decision, do what your parents do
Command
Never enough, decisions made wrong, gov gets things first
Free - Market
Capitalism, Laisez Faire
Socialism
Vote and lots of taxes and free stuff
Communism
Forced socialism
Human Resources
Unskilled labor
Capital
To an economist, factories, machineries, tools to make smth
Entrepreneurship
Rolling up sleeves and making smth new
Most Imp British ppl
Isaac Newton, Shakespeare, Churchill
Industrial Age
Recall and comprehension required, life focuses on factory
Information Age
Critical thinking, high paying skilled jobs
Info-Tech Age
Flexible/Adaptable
Classical Econ
Adam Smith
Cainsian Econ
Marx
John Graunt
1620-1674, Dad of Stats
Sir William Petty
Rudimentary GDP, got gov to use stats
David Hume
Anti-Mercantilist, trade not zero sum, influenced Smith
Pillars of Cap
Private Property, Prices, Competition, Entrepreneurship, Free Press
Private Property
People take care of own crap better
Prices
Gives items to people who maximize the utility
Competition
We lose jobs but gain more than we lost every year.
Entrepreneurship
Keeping rewards spurs innovation
Free Press
Calls out corruption
Hegel
1770-1831, philosopher who influenced Marx (change very imp)
Das Capital
1867, by Engel (father of socialism and communism)
Gross Domestic Product
GDP, measure the size of an economy (Consumers, business and Gov, Export - Import, Extra product = inventory
Scarcity
Not enough to produce necessary goods and services
Opportunity Cost
What you give up to get something
Marginal Change
Small adjustment to current plan
Incentive
Smth that induces a person to act
Models
Simplify reality to help us get it
Micro Econ
How households and firms make decisions
Macro Econ
Study of economy wide phenomena
Diminishing Marginal Returns
Value goes down as time passes
Market Economy
An economy that allocates resources through de-cntralization
Efficiency
Getting the most from scarce resources
Positive
A statement describing how world is
Normative
How world should be
Production
How much you produce
productivity
Quantity of goods and services produced by each hour of a workers time
Market Failure
If the market gets smth wrong
Market Power
The ability of one provider to unduly influence market prices
Non- Rival factors of proction
when a product isn’t scarce, like assembly line analysis
Comparative Advantage
One has an advantage when they can make a good with less supplies
Absolute Advantage
Smaller quality of inputs to make goods
Price of Trade
In order for two people to benefit from a trade, the price must be between the two opportunity costs
