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History of Econ. Multiple Choice > 1. 10 Econ. Principles > Flashcards

1. 10 Econ. Principles Flashcards

1
Q

economy

A

“one who manages a household”
Greek origin

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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2
Q

scarcity

A

the limited nature of society’s resources

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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3
Q

economics

A

the study of how society manages its scarce resources

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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4
Q

4 principles of individual decisionmaking

A
  1. people make tradeoffs
  2. the cost of something is what you give up to get it
  3. rational people think at the margin
  4. people respond to incentives

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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5
Q
  1. people make tradeoffs
A

trading off one goal against another

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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6
Q
  1. the cost of something is what you give up to get it
A

comparing costs and benefits of alternative courses on action

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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7
Q
  1. rational people think at the margin
A

small incremental adjustments to an existing plan of action

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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8
Q
  1. people respond to incentives
A

behavior may change when costs or benefits change

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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9
Q

efficiency

A

society getting most it can from scarce resources

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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10
Q

equity

A

distributing economic prosperity fairly among the members of society

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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11
Q

opportunity cost

A

whatever must be given up to obtain some item

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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12
Q

marginal changes

A

small incremental adjustments to a plan of action

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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13
Q

QUICK QUIZ

A

list and briefly explain 4 principles of individual decision-making

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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14
Q

principles 1-4

A

discuss individual decision-making

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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15
Q

principles 5-8

A

discuss people interacting with one another

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

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16
Q
  1. trade can make everyone better off
A

trade between two parties can make each country better off

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

17
Q
  1. markets are a good way to organize economic activity
A

…promotes overall economic well-being
Adam Smith’s “invisible hand”, 1776, An Inquiry into the Nature and Causes of the Wealth of Nations.

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

18
Q

market economy

A

an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

19
Q
  1. governments can sometimes improve market outcomes
A
  1. to promote efficiency
  2. to promote equity

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

20
Q

market failure

A

a situation in which a market left on its own fails to allocate resources efficiently

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

21
Q

externality

A

the impact of one person’s actions on the well-being of a bystander

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

22
Q

market power

A

the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

23
Q

QUICK QUIZ

A

list and briefly explain the 3 principles concerning economic interactions

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

24
Q

principles 8-10

A

workings of the economy as a whole

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

25
Q
  1. a country’s standard of living depends on its ability to produce goods and services
A

almost all variation in living standards is attributed to differences in a country’s productivity

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

26
Q

productivity

A

the amounts of goods and services produced from each hour of a worker’s time

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

27
Q
  1. prices rise when the government prints too much money
A

in almost all cases of large of persistent inflation, the culprit turns out to be the same - growth in the quantity of money

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

28
Q

inflation

A

an increase in the overall level of prices in the economy

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

29
Q
  1. society faces a short-run tradeoff between inflation and unemployment
A

reducing inflation is often thought to cause a temporary rise in unemployment

  • see Phillips curve

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

30
Q

Phillip’s curve

A

shows the short-run tradeoff between inflation and unemployment

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

31
Q

QUICK QUIZ

A

list and briefly explain the 3 principles that describe how an economy works as a whole

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

32
Q

Table of 10 Principles of Economics

A

page 15

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

33
Q

possible test questions

A

pages 16 & 17

Mankiw, N. (2023). Principles of Economics (second edition, 3-17). Macmillan Learning Inc.

History of Econ. Multiple Choice (4 decks)

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