Economic Basics
This is the fundamental economic problem.
What is scarcity?
When deciding whether a candy bar is worth its price of $1, a consumer is completing this mental process.
What is a Cost-Benefit Analysis?
Any medium of exchange between suppliers and producers is known as this.
What is a market?
In a market economy, prices act as this.
What is a signal (of value)?
All economies rely on these two fundamental forms of activity.
What are production and consumption?
Fundamentally, economics studies this.
What are decisions?
The ability of a product to satisfy wants is known as this.
What is utility?
The behavior of producers in a market is described by this concept.
What is supply?
This concept describes how, in command economies, prices set by the government fail to communicate the value of a product accurately.
What is the "Knowledge Problem?"
This econometric statistic measures an economy's overall productive output.
What is Gross Domestic Product (GDP)?
What are resources and wants?
This term describes a reason or motivation behind a person's decisions or actions.
What is an incentive?
Before giving out a loan, banks use this as a measure of trust.
What is credit/credit score?
This is a type of inflation in which the increase in price of one product leads to the increase of prices for several other products.
What is cost-push inflation?
This concept describes the state of one producer being able to be more productive than another producer.
What is comparative advantage?
This factor of production describes individual people who control capital.
What are entrepreneurs?
When choosing between two options, the option not taken is known as this.
What is opportunity cost?
This is the primary incentive for businesses to produce things efficiently.
What is profit?
What is the government?
This organization was created by Franklin D. Roosevelt in order to increase American trust in banks.
What is the Federal Deposit Insurance Corporation (FDIC)?
This explains the difference in value between diamonds and water.
What is the paradox of value?
These are common beliefs or values which serve economic purpose.
What is an institution?
This is a system in which banks loan out a portion of deposited money and hold the remainder in "reserve."
What is fractional reserve banking?
When currency experiences this phenomenon, consumers have an incentive to avoid spending and to save their money.
What is deflation?
This metric tracks the spending power of Americans by taking inflation into account when looking at individual earnings.
What are real wages?