What is economics ? Flashcards
What are the two types of economics ?
Macro economics and micro economics
What is macroeconomics ?
This describes what goes on within the external environment surrounding an organisation
What is mircoeconomics?
This is the environment within an organisation
Why is economics useful for managers `/
- it examines how resources are used and what products are made
- it analyses how changes affect costs and demand for goods
- it allows for successful strategies to be built
Types of economics ? (N+P)
Normative and positive
What is normative economics ?
These are issues that are a matter of opinion
What is positive economics ?
These are issues that are factually based
What does consumer sovreignty mean ?
This is when individual consumers have ultimate power over what markets produce
What are the types of state intervention ?§
- The government directly produces goods and services
2. The government regulates the market
What is an opportunity cost ?
This is the best alternative use of a resource
What is the difference between a good and a service ?
A good is a tangible product while a service is an intangible product
What is a free market ?
A free market is a market that the government has little / no control over
What is a recession ?
A decline in real GDP that occurs for at least 2 consectutive quarters of a year
What does utility mean ?
The satisfaction from the consumption of a good
What is marginal utility ?
The extra satisfaction from the consumption of an extra good
