Week 1 - Introduction To Microeconomics Flashcards
What is microeconomics
The study of
individual parts of the
economy, such as
public choices,
business choices and
personal choices
What is macroeconomics
The study of the
economic system as
a whole, such as
national income,
trade cycle,
unemployment rate,
inflation and general
price level.
Wjat are the Basic economy concept
- Scarcity
- Opportunity cost
- Choice
What is scarcity
Scarcity is defined as wants always exceed limited
resources to satisfy them
What is choice?
When scarcity exists, choices are to be made.
What is opportunity cost?
Opportunity cost is defined as the second best
alternative that has to be forgone for another choice
which gives more satisfaction.
What are the basic economic problem?
- What to produce
- How to produce
- For whom to produce
Factors that influence the shift of ppc
- Economic growth
- Improvements in technology
- Population
What does it mean when the ppc is concave?
It means there is an increasing in opportunity cost
What does it mean when the ppc is convex
Decreasing in opportunity cost
What does it mean when. The ppc is linear
Constant opportunity cost
What are the types of economic systems?
- Capitalism
- Socialism
- Mixed economy
- Islamic economy
What is capitalism
An economic system where individuals and sellers
make economic decisions using a price system
What are the characteristics of capitalism
- Private ownership of resources
q Freedom of enterprise and choice
q Consumers’ sovereignty
q Competition
q Government intervention
q Price system
What is socialism
An economic system where all the economic decisions
are made by the government or a central authority
