Econ 4 Dummies
____ is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity, all the things that influence those choices, and the arrangements that coordinate them.
Economics
A basic idea of economics is that in making choices, people act rationally. ______ is one that uses the available resources to best achieve the objective of the person making ______.
Rational Choice
Economists call the productive resources ______. ________are grouped into four categories.
Factors of Production
We can organize the data you’ve just studied using the ____ —a demonstration of the economy that shows ____ of expenditures and incomes that result from decision makers’ choices and the way those choices interact to determine what, how, and for whom goods and services are produced.
Circular Flow Model
_____ are items that individuals and governments buy and use up in the current period. ____ bought by households include items such as housing, automobiles, bottled water, ramen noodles, chocolate bars, Po’ boy sandwiches, movies, downhill skiing lessons, and doctor and dental services.
Consumptive Goods & Services
Our inability to satisfy all our wants is called _____ The ability of each of us to satisfy our wants is limited by the time we have, the incomes we earn, and the prices we pay for the things we buy. These limits mean that everyone has unsatisfied wants. The ability of all of us as a society to satisfy our wants is limited by the productive resources that exist.
Scarcity
The benefit of a one unit increase in an activity is called ____. _____ is what you gain from having one more unit of something.
Marginal Benefit
____ is the work time and work effort that people devote to producing goods and services. ____ includes the physical and mental efforts of all the people who work on farms and construction sites and in factories, shops, and offices.
_____ are individuals or groups of people living together. The 124 million _____ in the United States own the factors of production—land, labor, capital, and entrepreneurship—and choose the quantities of these resources to provide to firms. ___ also choose the quantities of goods and services to buy.
Households
Choices that are the best for the individual who makes them are choices made in the pursuit of ________.
Self Interest
_____ is the study of the aggregate (or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make. Some examples of questions are: Why did production and jobs expand slowly in the United States during 2014 and 2015? Why are incomes growing much faster in China and India than in the United States?
Macroeconomics
The opportunity cost of a oneunit increase in an activity is called _______. The_____ of something is what you must give up to get one additional unit of it.
Marginal Cost
____ is the human resource that organizes land, labor, and capital to produce goods and services.
Goods and services are bought and sold in ____
Goods Markets
Choices that are the best for society as a whole are said to be in the _______.
Societal Interest
_____ is the study of the choices that individuals and businesses make and the way these choices interact and are influenced by governments. Some examples of these questions are: Will you buy a 3D TV or a standard one? Will Nintendo sell more units of Wii if it cuts the price?
Microeconomics
______ is an exchange—giving up one thing to get something else. Because we face scarcity, we must make choices. And when we make a choice, we select from the available alternatives. You can think about choices as_____. When you choose one thing, you give up something else that you could have chosen.
Tradeoff
In economics, _____ includes all the “gifts of nature” that we use to produce goods and services. _____ is what, in everyday language, we call natural resources. It includes ____ in the everyday sense, minerals, energy, water, air, and wild plants, animals, birds, and fish. Some of these resources are renewable, and some are nonrenewable.
Land
____ are the institutions that organize the production of goods and services. The 28 million ____ in the United States choose the quantities of the factors of production to hire and the quantities of goods and services to produce.
Firms
______ are objects that businesses and governments buy to increase productive resources to use during future periods to produce other goods and services. _____ bought by businesses include items such as auto assembly lines, shopping malls, airplanes, and oil tankers.
Capital Goods
____ is a description of the economy or a part of the economy that includes only those features assumed necessary to explain the observed facts
Economical Model
____ of something is the best thing you must give up to get it. You most likely think about the cost of something as the money you must spend to get it. But dig a bit deeper. If you spend $10 on a movie ticket, you can’t spend it on a sandwich. The movie ticket really costs a sandwich. The _____ of something is what must be given up to get it, not the money spent on it. Economists use the term _____ to emphasize this view of cost.
Opp Cost
______ consists of the tools, instruments, machines, buildings, and other items that have been produced in the past and that businesses now use to produce goods and services. _____ includes hammers and screwdrivers, computers, auto assembly lines, office towers and warehouses, dams and power plants, airplanes, cookie factories, and shopping malls.
Capital
The the services of factors of production are bought and sold in _____
Factor Markets
Economists use a special name for human skill:____ ._____ is the knowledge and skill that people obtain from education, onthe- job training, and work experience.
Human Capital