Unit 1 Test Flashcards
Point inside the curve of opportunity cost curb represent what?
A production possibility but under efficient use of resources
Went outside the curve represent what?
Not possible with the current resources or technology
New technology or resources that impact capital goods do what to the curve?
Move the whole curve outward
New technology resources that impact only consumer goods do what to the curb?
It curves out but starts at the same place
What are the four assumptions of production possibilities?
Two products, fixed resources, six technology, full efficiency
What are the four types of resources?
Land, labor, capital, entrepreneurship
What is the utility?
Usefulness
What is marginal utility?
Additional uses
Marginal cost equals what?
Additional cost
Marginal benefit equals what?
Additional benefits
What are the five economic assumptions
Resources are scarce, every choice has a trade off, people act out of self interest, people make comparisons to make choices, situations are explained in graphs
What is scarcity?
A resource that is wanted but limited
What is macro economics?
It’s the economy as a whole and example is government spending
What is Matt microeconomics?
Smaller units of economics and example is an individual firm
What is the normative statement?
In opinion
What is a positive statement?
A fact (can be untrue)
What is allocative efficiency?
The producer produces products desired by society
What is productive efficiency?
The producer produces products in the least costly way
What is land?
Natural resources
What is labor?
People/the workforce
What is capital?
Tools, equipment, factories/things that are used in production
What is entrepreneurship?
Bringing new products to the market
What are capital goods?
They are used to make consumer goods/not available to the public
What are consumer goods?
Things every day people can buy
What are the three economic questions?
What should be produced? How it should be produced? And who it should be produced for?
What is the command economy?
It has government own resources, central planning, quotas, no incentives, and very inefficient
Is a market economy?
Privately owned resources, spontaneous order, public goods and externalities, and runs on free-market principles
What is a one word definition of economics?
Scarcity
Is there a solution for scarcity?
No
What is opportunity cost?
What you’re giving up to do something else
How do societies and governments deal with scarcity?
They asked for three economic questions and create an economic system
What are the pillars of free enterprise?
Private property, market competition, pricing system, profit motive
Who gets what in a free market is determined by?
The price and who is well willing to pay that price
What is a comparative advantage?
Who is at the least to produce something
What is an absolute advantage?
Who can make the most of the product
If the benefits outweigh the cost of something what should a person do?
Go for it
Doing everything for yourself Violates what law?
Comparative advantage
Input
Other goes under
Output
Other goes over
Any point on the line of the opportunity cost curve represents what?
Full efficient use of resources
