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AP Microeconomics > Basic Concepts > Flashcards

Basic Concepts Flashcards

1
Q

Economics

A

Study of scarcity and choice

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2
Q

Individual choice

A

Decisions by individuals about what to do, which involves what not to do

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3
Q

Economy

A

A system for coordinating a society’s productive and consumptive activities

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4
Q

Market Economy

A

Decisions of individual producers and consumers largely determine what, how, and for whom to produce, with little government involvement

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5
Q

Command Economy

A

Industry is publicly owned and a central authority makes production and consumption decisions

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6
Q

Incentives

A

Rewards/Punishments that motivate a particular choice

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7
Q

Property Rights

A

Establish ownership and grant individuals the right to trade goods and services with each other

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8
Q

Marginal Analysis

A

The Study of the costs and benefits of doing a little more or a little less of an activity

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9
Q

Resource

A

Anything that can be used to produce something else

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10
Q

Entrepreneurship

A

Describes the efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production values

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11
Q

Scarce

A

Something that is not available in sufficient quantities to satisfy all the various ways society wants it

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12
Q

Opportunity Cost

A

What you must give up in order to get something

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13
Q

Microeconomics

A

Study of how people make decisions and how those decisions interact

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14
Q

Macroeconomics

A

Overall ups and downs of economy

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15
Q

Economic Aggregates

A

Economic measures that summarize data across many different markets

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16
Q

Positive Economics

A

How the economy actually works

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17
Q

Normative Economics

A

How economy should work

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18
Q

Business Cycle

A

Short run alteration between economic downturns and upturns

19
Q

Depression

A

Deep, prolonged economic downturn

20
Q

REcession

A

Periods of economic downturns when output and employment are falling

21
Q

Expansions

A

Recoveries, economic upturn where output and employment are rising

22
Q

Employment

A

Number of people currently employed in the economy

23
Q

Unemployment

A

Number of people looking for work but aren’t employed

24
Q

Labor Force

A

Sum of employed and unemployed

25
Q

Unemployment Rate

A

Percent of labor force that is unemployed

26
Q

Output

A

Quantity of goods and services produced

27
Q

Aggregate Output

A

Economy’s total production of goods and services for a given time period

28
Q

Inflation

A

Rise in overall price

29
Q

Deflation

A

Fall in overall prices

30
Q

Price Stability

A

Aggregate price level changes slowly

31
Q

Economic Growth

A

Increase in maximum amount of goods and services an economy can produce

32
Q

Model

A

Simplified representation used to better understand a real life situation

33
Q

Other Things Equal

A

(Ceteris Paribus) Condition in which all other relevant factors remain unchanged

34
Q

Trade Off

A

Idea that you have to give up something for something else

35
Q

PPC

A

Tradeoffs facing an economy that produces goods

36
Q

Efficent

A

Condition that is satisfied when there is no way to make anyone better without making at least one person worse

37
Q

Technology

A

Technical means for producing goods and services

38
Q

Trade

A

Provide goods and services to others to receive in return

39
Q

Gains from Trade

A

People get more goods/services through trade than if than if they were self sufficient

40
Q

Specialization

A

Specializing in one skill/area that one is good at

41
Q

Comparitive Advantage

A

Producing a good at a lower opportunity cost than others

42
Q

Absolute Advantage

A

If a person can make more of a good with the same amount of given time and resources

43
Q

Capital

A

Manufactured goods that are used to produce other goods

44
Q

Opportunity Cost Formula

A

What you are sacrificing/What you are gaining

AP Microeconomics (5 decks)

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