Basic concepts and definitions (Chapters 1-2) Flashcards
1
Q
scarcity
A
- in relation to wants, existing resources are inadequate
2
Q
economics
A
- the study of how society manages its scarce resources
3
Q
resources
A
- land, labour, and capital
4
Q
opportunity costs
A
- cost of something in terms of what is given up
5
Q
households
A
- make consistent decisions
- maximize well being
- principal owners of resources
6
Q
firms
A
- make consistent decisions
- maximize profit
- principal users of resources
7
Q
government
A
- all officials or agencies under direct control of the federal, provincial, or municipal governments
8
Q
foreign sector
A
- economic agents outside the domestic economy
9
Q
market
A
- area in which buyers and sellers negotiate the exchange of a commodity
10
Q
circular flow diagram
A
- clockwise flow is real (physical)
- counterclockwise flow is monetary
- government flows - real and monetary
11
Q
microeconomics
A
- study of the behaviour of individual agents and markets
12
Q
macroeconomics
A
- focuses on broad aggregates such as overall production, employment, prices, etc.
13
Q
elements of an economic model
A
- theory
- assumptions
- hypothesis
- variables
- dangers
14
Q
endogenous variable
A
- induced, dependent
- variables explained within a theory
15
Q
exogenous
A
- autonomous, independent
- outside variables
