Intro to Economics
The study of how we make decisions in a world in which resources are limited.
What is economics?
Work that is performed by someone, this includes haircuts, home repairs, and forms of entertainment such as concerts.
What are services?
Alternative that is available whenever a choice is to be made.
What is a trade-off?
Economic system in which the allocation of scarce resources, and other economic activities, are based on ritual, habit or custom.
What is a traditional economy?
This is the struggle among sellers to attract consumers.
What is competition?
The study of the broad economy, such as how an economy grows and how growth is maintained.
What is macroeconomics?
The wealth that an economy generates is made possible by this. The key feature of this is the market, a location or mechanism that allows buyers and sellers to exchange a specific product.
What is the circular flow of economic activity?
Diagram representing the maximum combination of goods and/or services an economy can produce when all productive resources are fully employed.
What is the production possibilities frontier?
Economic system which supply, demand, and the price system help people make economic decision and allocate resources.
What is a market economy?
This means that individuals have the freedom to choose their occupation, employer, and current job location.
What is economic freedom?
The dollar value of all final goods, services, and structures produced within a country’s border
What is Gross Domestic Product(GDP)?
A measure of the amount of goods and services produced with a given amount of resources in a specific period of time.
What is productivity?
Quality of life based on ownership of necessities and luxuries that make life easier.
What is the standard of living?
Economic and political system in which all factors of production are collectively owned and controlled by the state.
What is communism?
This is the fundamental feature of capitalism that allows individuals to own and control their possessions as they wish.
What is private property rights?
When using resources, economists must answer these three basic questions:
- ___________ to produce
- ___________ to produce
- ___________ to produce
WHAT to Produce
HOW to Produce
FOR WHOM to Produce
When manufactured goods are used to produce other goods and services.
What are capital goods?
Way of thinking about a choice that compares the cost of an action to its benefits.
What is a cost-benefit analysis?
This suggests that increasing market-driven consumption improves happiness and well-being by acquiring goods and services.
What is consumerism?
This is the act of buyers and sellers freely and willingly engaging in market transactions.
What is voluntary exchange?
The factors of production which are resources required to produce the things we would like to have include these four:
What are land, capital, labor, and entrepreneurs?
The U.S. economy has a remarkable degree of this. This means that we rely on others, and others rely on us, to provide most of the good and services we consume.
What is economic interdependence?
This is a market economy in which privately owned businesses have the freedom to operate for a profit with limited government intervention.
What is the Free Enterprise economy?
In a command economy, resources that are commonly owned are effectively unowned. All of their users, or workers, lack any incentive to preserve them.
What is the tragedy of the commons?
This is the role of consumer as ruler of the market when determining the types of goods and services produced.
What is consumer sovereignty?