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Econ > Econ Test 1 > Flashcards

Econ Test 1 Flashcards

1
Q

What is the definition of Economics?

A

The study of how people make choices without unlimited wants and needs with limited resources

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2
Q

What is Micro Economics?

A

Study of a small group or individual making choices.

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3
Q

What is Macro Economics?

A

Study of a large group or companies making choices.

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4
Q

Biggest problem facing society?

A

Scarcity

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5
Q

Definition of Scarcity?

A

Unlimited wants and needs met with limited resources

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6
Q

Wants

A

Desired; satisfaction

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7
Q

Needs

A

Required; survival

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8
Q

What is Opportunity Cost?

A

The next best thing you gave up

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9
Q

What is utility?

A

Satisfaction or Usefulness

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10
Q

What is utility maximization?

A

doing what benefits you and costs the least

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11
Q

General Economics Idea

A

Idea that people, when behaving rationally, will do what they get the most benefit from and that costs them the least

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12
Q

Basic Economic Questions

A

What to produce?
How to produce?
Who to produce for?

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13
Q

What to produce?

A

Guns/butter

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14
Q

How to produce?

A

quality or quantity

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15
Q

Who to produce for?

A

Target market

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16
Q

What is economic concerned with?

A

Transferable to others

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17
Q

Goods

A

an item; useful or satisfies

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18
Q

Consumer Goods

A

for final use; ex) pencil

19
Q

Durable Good

A

last long; ex) furniture

20
Q

Non-Durable Goods

A

wear out; ex) shoes, food, etc.

21
Q

Market

A

is a location or other mechanism that allows buyers and sellers to exchange a certain economic product

22
Q

Factor Market

A

where factors of production are brought and sold

23
Q

Product Markets

A

where producers sell their goods and consumers buy

24
Q

Value

A

refers to a worth that can be expressed in dollars and cents

25
Q

Paradox of Value

A

situation where necessities, water, have little monetary value, whereas non-necessities, diamonds have a higher value

26
Q

Wealth

A

accumulation of products that are tangible, scarce, useful, and transferable

27
Q

Gross Domestic Product

A

all the stuff produced within a nation

28
Q

Gross National Product

A

around the world

29
Q

Economic Growth

A

occurs when a nations total output of goods and services increases over time

30
Q

Productivity

A

measure of the amount of output produced by a given amount of inputs

31
Q

Division of Labor

A

first developed by adam smith

32
Q

Specialization

A

people puting on tires

33
Q

Productivity Definition

A

comes from investments in human capital, or the sum of the skills, abilities, health, and motivation of people

34
Q

Factors of Production Definition

A

resources are things we need to make other products

35
Q

Factors of Production

A

land, labor, capital, and entrepreneurship

36
Q

Gifts of nature refers to?

A

Wind, Water, Wood, Rocks, Etc.

37
Q

Labor

A

peoples ability to work; ex) mowers

38
Q

Capital

A

any of the tools used to produce goods and services

39
Q

Production Possibilities Curve (or frontier)

A

model that shows alternative way that an economy can use its scarce resources

40
Q

PPC Key Assumptions

A

only 2 goods can be produced
full employment of resources
fixed resources
fixed technology

41
Q

Constant Opportunity Cost

A

Resources are easily adaptable for producing either good

42
Q

Law of increasing opportunity cost

A

as you produce more of any good, the opportunity cost (forgone production of another good) will increase

43
Q

Three shifters of the PPC

A

change in resources; quality or quantity
change in technology
change in trade

44
Q

Capital goods and future growth

A

countries that produce more capital goods will have more growth in the future

Econ (2 decks)

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