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Economics 124 > Overview Of Economics > Flashcards

Overview Of Economics Flashcards

1
Q

is the study if the proper allocation and efficient use of scarce resources to produce commodities for the satisfaction of unlimited needs and wants of man

A

Economics

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2
Q

Four Sectors of Economy

A

Household
Business Firms
Government
The Rest of the World

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3
Q

Consuming unit

A

Household

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4
Q

Producing Unit

A

Business Firms

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5
Q

Controls the economic activities of man

A

Government

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6
Q

Imports and exports - open economy globalization

A

The rest of the world

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7
Q

Father of economics

A

Adam Smith

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8
Q

each works using one’s self-interest, nevertheless benefits the whole market

A

Invisible Hand

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9
Q

absence of governmental control over business

A

Laissez-faire

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10
Q

each individual person will specialized in part of the
production system

A

Division of Labor

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11
Q

non-governmental intervention of trading among nations (no tariff/no quota)
-accordance to the principles of natural liberality

A

free trade

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12
Q

non-governmental intervention in the operation of commercial enterprise

A

free enterprise

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13
Q

18th century England
introduction of machine in factories

A

Industrial Revolution

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14
Q

natural resources - Rent

A

Land

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15
Q

human effort exerted by man (intellectual, emotional,
psychological, physical)-Salaries & wages

A

Labor

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16
Q

man-made resources- Interest

A

capital

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17
Q

it entails special
ability of man in combining all other economic resources
(management, innovative, creative, etc.)-profits

A

Entrepreneurship/entrepreneurial ability

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18
Q

creation of human satisfying goods. Transformation of inputs/raw materials into output

A

production

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19
Q

transfer of position of the goods/services
from one sector to another sector

A

distribution

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20
Q

financial transactions involves money

A

exchange

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21
Q

using the goods and services

A

consumption

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22
Q

limited resources

A

scarcity

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23
Q

5 Economic Questions

A
  1. What goods and services to produces?- Set a system of prioritization
  2. How to produce goods and services?-Methods of production- Traditional
    method vs. modern method
  3. For whom the goods and services to produce?
  4. How much to produce?
  5. When (normal & seasonal commodities) and where to produce?
24
Q

value of foregone alternative

A

opportunity cost

25
Q

Accessibility of production

A
  1. accessible to the market
  2. accessible to labor
  3. accessible to the source of raw materials
  4. accessible to the means of transportation
26
Q

goals of economics

A
  1. to strengthen economic freedom
  2. to promote economic efficiency
  3. promote economic stability
  4. improve economic security
  5. attaining a high level of growth in the economy
27
Q

pertains to the study of the behavior of individual units in the economy
- known as classical economics
-household and business firms

A

microeconomics

28
Q

Economy of the whole ( employment and unemployment, inflation

A

Macroeconomics

29
Q

Prosperous years for the US economy

A

1920s

30
Q

Wall Street Collapse - Great Depression of 1930s

A

1929

31
Q

Author General Theory of Employment Interest and Money 1935

A

John Maynard Keynes

32
Q

Process of directing economic relationships by examining behavior and events and determining the casual relationships among the data and activities observed

A

Economic Analysis

33
Q

Used to analyze relationships among economic variables from particular to general (inductive) or thru deductive (general to particular)

A

Logic

34
Q

Quantitatively describe economic behavior and serve as basis for hypothesis testing.

A

Statistics

35
Q

A hypothesis becomes theory or principle when

A

Empirically Validated

36
Q

Enables analysts to conceptualize and quantify a hypothesis for empirical validation

A

Mathematics

37
Q

an aid in understanding how
economy operates because it explains how economic
variables are related to one another.

A

economic analysis

38
Q

Purposes of Economic Analysis

A
  1. Economic analysis is an aid in understanding how
    economy operates because it explains how economic variables are related to one another.
  2. It permits prediction of the results of changes in the
    economic variables.
  3. It serves as basis of policy formulation.
39
Q

economic policy

A
  • Consists of intervention or courses of action taken by the government or other private institutions to manipulate the results of economic activity.
    -The policy adopted by the government may be monetary, fiscal, or trade for the purpose of achieving economic
    welfare.
40
Q

Economists have developed techniques referred to as

A

Scientific Approach

41
Q

Measures that can change from time to time from observation to observation

A

Variables

42
Q

Statement of the proposed relationship between two or more variables

A

Theory/Hypothesis

43
Q

A formal statement of a theory, usually mathematical statement of a presumed relationship between two or more variables

A

Model

44
Q

Absolute truth

A

Law

45
Q

Hypothesis that had withstand the rigors of testing (foolish to regard set or principles and theories as absolute truth)

A

Principles

46
Q

Definition of the problem

A

Specifications and definition of its postulates

47
Q

Data Gathering

A

Observation of the facts concerning the activities about which we want to theorize

48
Q

Application of the rules of logic to the observed facts in an attempt to establish casual relationship among them and to eliminate as many irrelevant and insignificant facts as possible

A

Economic Analyses

49
Q

Once hypothesis have been formulated, they must be thoroughly tested to determine the extent of which they are valid.
-Applying statistics

A

Hypothesis testing

50
Q

Hypothesis that will hold up most of the time in most of the circumstances to which they are relevant

A

Principles

51
Q

Functions of economic theory

A
  1. Explain the nature of economic activity
  2. Predict what will happen to the economy as fact change
52
Q

Describes the facts and data in the economy, description of economic outcomes, with what exists, how it works, without making judgment

A

Positive Economics

53
Q

Judges economic outcomes; what out to be, policy economics-courses of action (law/legislations)

A

Normative Economics

54
Q

Ways of Expressing Theories and Models

A

-Verbal Statment
-Graphical
-Tabular
-Mathematical Notation

55
Q
A
56
Q

is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.

A

Gross domestic product (GDP)

57
Q

refers to what you have to give up to buy what you want in terms of other goods or services.

A

Opportunity Cost

Economics 124 (3 decks)

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