Economics Intro
Policy prescriptions involving value judgments about the way in which scarce resources are allocated
What is normative economics?
Figuring out what is to be produced, how, and for whom?
A point in this region of the PPF indicates that resources in an economy are not being fully utilized.
What is inside the PPF curve?
Swapping goods for one another without the use of money
What is barter?
The owner of most resources in a command economy
What is the state (government)?
A graph showing how much an economy can produce using existing resources
What is a Production Possibility Frontier (PPF)?
Manufactured stock of machines, factories, roads, etc., used in production.
What is capital?
Goods and services used by people to satisfy their needs and wants.
What are consumer goods?
Another name for the government sector of the economy
What is the public sector?
The economist who believed in minimal state intervention in the economy and who argued against Keynesian economics following the Great Depression
Who is Friedrich Hayek?
Sciences studying societies and human behavior, including sociology, economics, etc.
What are the social sciences?
The factors of production.
What are land, labor, capital, and entrepreneurship?
Goods used in the production of other goods.
What are capital goods?
The sector of the economy is otherwise known as the manufacturing sector, involving the production of goods.
What is the secondary sector?
A protectionist strategy in which the amount of imports of a good are restricted to a certain quantity.
What is a quota?
Adjective meaning based on scientific testing or practical experience; not ideas
What is empirical?
Capital that ends up as part of the produced good.
What is circulating (or working) capital?
Investment in this type of good results in future economic growth (as an alternative to present consumption)
What are capital goods?
The ability to change an asset into cash, able to purchase goods and services
What is liquidity?
The Prime Minister of the United Kingdom in the 1980s who implemented economic reforms by reducing state intervention in the UK economy.
Who is Margaret Thatcher?
All things being equal; the assumption that all variables except for one remain equal
What is Ceteris Peribus?
The value of the productive potential of a person or group of people, including skills, talents, training, etc.
What is human capital?
Distribution of resources such that it is impossible to redistribute them without making someone worse off.
What is allocatively efficient?
The value of assets owned by shareholders
What is equity?
The year in which Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations.
What is 1776?