Intro to Econ
The economic concept that states society has unlimited wants but limited resources.
What is scarcity?
All natural resources that are used to produce goods and services.
What is Land?
ALL the alternatives that we give up when we make a choice.
What are Trade-offs?
Economic questions are answered by habits and customs (the way it has always been done)
What is a Traditional Economy?
Resources are easily adaptable for producing either good. Result is a straight line PPC (not common).
What is Constant Opportunity Cost?
The study of small economic units such as individuals, firms, and markets.
What is microeconomics?
Any effort a person devotes to a task for which that person is paid.
What is Labor?
The most desirable alternative given up when you make a choice.
What is Opportunity Cost?
The government owns all the resources and answers the three economic questions.
What is a Command/Centrally Planned/Control Economy?
As you produce more of any good, the opportunity cost (lost production of another good) will increase.
What is Increasing Opportunity Cost?
Study of the large economy as a whole.
What is Macroeconomics?
Any human-made resource that is used to create other goods and services.
What is Physical Capital?
The traditional out of pocket costs associated with making a decision.
What are explicit costs?
Little government involvement in the economy. Individuals OWN resources and answer the
three economic questions.
What is a Free Market Economy?
How would new computer making technology shift a PPC for Computers and Coconuts?
A shift outward only for Computers.
Statements based on facts. Avoids value judgements (what is).
What are Positive Statements?
Any skills or knowledge gained by a worker through education and experience.
What is Human Capital?
As you consume more of anything, the additional satisfaction that you receive will eventually start to decrease.
What is the Law of Diminishing Marginal Utility?
Individuals have the right to choose and own property, but the government regulates business practices and limits some choices.
What is a Mixed Market Economy?
How would a disease that kills 90% of coconut trees shift a PPC for Computers and Coconuts?
A shift inward only for Coconuts.
Statements that includes value judgements (what ought to be).
What are Normative Statements?
Anyone that creates, launches, and runs a new business.
What is an Entrepreneur?
An economic concept illustrating the tradeoff governments face between spending on military defense and domestic social programs due to limited resources.
What is Guns and Butter?
The concept that society’s goals will be met as individuals seek their own self-interest.
What is the Invisible Hand?
How would a decrease in the demand for coconut scented sun screen shift the PPC for Computers and Coconuts?
It would not shift, but slide along the line towards Computers.