What is Economics?
What is economics?
The study of how People seek to satisfy their needs and wants by making choices.
What type of Economic System does the United States have?
A Mixed Market Economy.
What is a business cycle?
A period of economic expansion followed by economic contraction.
What is the definition for law of demand?
The process for determining the price of a good starts with the consumer's demand for goods.
Define the Law of Supply
The idea that as the price of a good rises the producer will want to make more of that product.
What is cost-benefit analysis?
A decision making process where you compare what you will sacrifice and what you will gain with a specific action.
What is competition?
Where producers try to gain more consumers than the other producers (in the same market), typically by lowering prices.
What is an economic good?
Products or services that have value and are scarce, requiring some level of effort and/or resources to obtain.
In which way would an increase in population affect demand?
Increase in people = increase in demand
What are some incentives?
Motivation/ profit.
What is underutilization?
Economic inefficiency.
The use of less than 100% of the resources in an economy.
What does the Circular Flow Model show?
The flow of money and goods between the product market and factor market.
What is macroeconomics?
The form of economics concerned with behavior of whole countries, economies, the whole world.
If the price rises what happens to the quantity?
The quantity goes down.
As the price of a product goes up, what happens to the the quantity supplied?
The price increases.
How does scarcity apply in making economic decisions?
It forces all of us to make choices by making us decide which option are most important to us.
What philosophy inspired Capitalism and became the main feature of the economic system?
Laissez-faire.
Business cycles last how long on average?
Four years.
In what 2 ways can law be shown?
A demand schedule and demand curve.
How does new technology affect the increase and decrease of supply?
new technology causes an increase in the supply.
What does the phrase "Guns and Butter" mean?
It is an economic phrase meaning that a country making military goods has less time to devote to consumer goods and vice versa.
What is another term used for Voluntary Exchange?
The "Invisible Hand."
What does the federal government try to encourage by providing incentives for making huge profits in the market place and protecting goods through copyrights?
Technological innovations.
What kind of relationship does a change in income have to demand?
A direct relationship.
Who serves as a great example of how the law of supply works?
Farmers.