The Basics
Thinking Like an Economist
Economic Systems
Is it Possible?
Anything Goes
100
This is the concept that we have unlimited wants but limited resources.
What is Scarcity
100
This is the most desirable alternative given up when you make a choice. The next best thing.
What is opportunity cost?
100
In a Free Market economy, individuals and business are motivated by ? to produce quality items efficiently.
What is PROFIT?
100
Economic model, this illustrates the maximum number of goods which can be produced using limited resources.
What is production possibility curve (PPC)?
100
These are individuals that benefit without paying.
What are free riders?
200
The study of how people choose scarce resources
What is economics
200
These are the traditional out of pocket costs associated with making a decision.
What are explicit costs?
200
In this type of economic system
1. individuals own the resources
2. the government regulates the production and distribution of many goods/service
3. individuals and the government answers the three economic questions
What is a mixed economy?
200
Any point below PPC illustrates this
What is underutilization/inefficiency?
200
Laws designed to prevent monopolies and promote competition.
What are anti-trust laws?
300
Study of small economic units such as individuals, firms, and markets.
What is Microeconomics?
300
In Economics, Utility = ? and Marginal = ?
What is Satisfaction and Additional?
300
In this type of economic system the government…
owns all the resources
answers the three economic questions
What is Command or Centrally Planned?
300
A straight PPC indicates which type of opportunity cost?
What is constant opportunity cost.
300
Car producers pollutants their plants release into the atmosphere is an example of ?
What is a negative externality?
400
These types of statements are based on facts. Avoids value judgements (what is).
What are Positive Statements?
400
The concept that unintended social benefits arise from individuals acting in their own self interest.
What is the Invisible Hand?
400
Public Goods have two criteria, what are they?
They must be non-exclusionary and have shared consumption.
400
A Bowed out or convex PPC demonstrates what law?
The law of increasing opportunity costs.
400
6 video games
500
These are the four factors of production
What are Land, Labor, Capital, Entrepreneurship?
500
The concept that 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?
500
Every society must answer three questions; what are they?
What goods and services should be produced?
How should these goods and services be produced?
Who consumes these goods and services?
500
There are three PPC shifters. Name two of them.
1. Change in resource quantity or quality
2. Change in Technology
3. Change in Trade (allows more consumption)
500
On the graph, the opportunity cost of moving from combination B to combination C is
200 consumer goods