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Economics > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

What is economics?

A

The branch of knowledge concerned with the production, consumption, distribution of goods and services, and the transfer of wealth

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2
Q

Simpler definition for econ?

A

The study of oeople and the choice they make

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3
Q

What are the two parts of economics?

A

Macro and micro economics

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4
Q

What are microeconomics?

A

The study of individuals, households, and companies behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals w individual and economic issues

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5
Q

What are Macroeconomics?

A

The branch of knowledge that studies behavior of the economy as a whole (city, state,nation) focuses on aggregate changes in the economy such as unemployment, growth rate, gross domestic product, and inflation

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6
Q

What is scarcity?

A

The condition that results from society not having enough resources to produce all the things people would like to have (wants and needs)

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7
Q

What are the three choices/questions of scarcity?

A

What to produce? How to produce? For whom to produce?

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8
Q

What is a need?

A

Basic requirement for survival

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9
Q

What is a want?

A

Something we would like to have, but is not necessary for survival

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10
Q

What are the two types of economic products?

A

Goods and services

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11
Q

What are goods?

A

A useful tangible item (physical) that is used to satisfy a need or a want

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12
Q

Four types of goods

A

Durable good- an item that lasts 3 or more years when used regularly
Nondurable good- last fewer than 3 years when used regularly
Consumer good- goods bought and used by individual consumers
Capital good- a tool ot good used to produce other goods

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13
Q

What are services?

A

Work or labor performed by someone

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14
Q

Difference between goods and services?

A

Goods are tangible (physical) and services are not

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15
Q

What is value?

A

The monetary worth of a good or service

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16
Q

What determines value?

A

The cost that someone will pay for something

17
Q

What is the paradox of value?

A

A contradiction between the high values of a non essential items and a low value of an essential item

18
Q

Who is adam smith?

A

Father of capitalism- in his book the wealth of nations argued that for something to have value it must be scarce and have utility (worth)

19
Q

What is the solution of the paradox of value?

A

Scarcity and utility are two factors that determine value.

20
Q

What is wealth?

A

The accumulation of products that are tangible, scarce, and have utility

21
Q

What makes up a nation’s wealth?

A

All tangible items

22
Q

Are goods and services counted as wealth?

A

Goods are counted, services are not

23
Q

Is anything free?

A

No, because resources are limited everything has a cost, even when it seems free

24
Q

TINSTAAFL

A

There’s no such thing as a free lunch

25
Q

What are the basic economic choices faced by all societies?

A
  1. What to produce? Decision is made either by the gov. (North Korea) or by the consumer (USA)
  2. How to produce? More automated machines, robots, or more workers? Must weigh the cost.
  3. For whom to produce it? Housing? Low income or high income?
26
Q

Our economy is made up of what two broad groups?

A

Producers and Consumers

27
Q

What is a producer?

A

A person, company, or country that makes, grows, or supplies goods or commodities for sale

28
Q

What are the four factors of production?

A
  1. Land- natural resources
  2. Capital- money, tools, equipment, machinery, etc
  3. Labor- people and workers
  4. Entrepreneurs- individual risk takers
29
Q

Are these four factor of prod necessary?

A

Everything that is made requires these 4 factors!

30
Q

What is opportunity cost?

A

The cost/value of the next best alternative given up

31
Q

Everything that we make has…

A

Tradeoffs: alternative choices that must be given up in favor of the choice we select (all the other alternatives)

32
Q

What is a consumer?

A

A person who purchases goods and services for personal use

33
Q

What are consumer rights?

A

Protect the against producers

34
Q

What are the 5 consumer rights?

A 
The right to...
Safety
Be informed
Choose
Be heard
Redress
35
Q

What is consumerism?

A

1960s

This social movement was an attempt to educate buyers about purchases they make and demand better and sager products.

Economics (6 decks)

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