Economics Flashcards
(21 cards)
What is the classic core problem of economics?
Limited resources versus unlimited wants
Scarcity forces _______
Choice
What does choice mean in economics?
Opportunity cost
What are the four factors of production?
- Land
- Labour
- Capital
- Entrepreneurship
What do production possibility curves illustrate?
- Opportunity cost
- Efficiency
- Economic growth
Classify the following types of goods: private goods, public goods, merit goods, demerit goods.
- Excludability
- Rivalry
What is the basic market mechanism?
Interaction of buyers and sellers
What do demand & supply curves represent?
The interaction of buyers and sellers
What does price elasticity of demand measure?
Responsiveness of quantity to price changes
What are the components of consumer and producer surplus?
Measure of welfare from market transactions
Why might a government intervene in the economy?
- Market failure
- Inequality
- Public goods
- Externalities
What are common methods of government intervention?
- Taxes
- Subsidies
- Price controls
- Regulation
What does the Gini coefficient measure?
Income and wealth distribution
What are key national income statistics?
- GDP
- GNI
- PPP
What visualizes the economy in terms of households and firms?
Circular Flow
What determines price level and output in an economy?
Aggregate demand and supply
What are the macroeconomic objectives?
- Growth
- Low unemployment
- Price stability
- Balance of payments
What is fiscal policy concerned with?
Government spending and taxation
What does monetary policy involve?
- Interest rates
- Money supply
What is the goal of supply-side policy?
Long-run productivity
What factors contribute to supply-side policy?
- Education
- Deregulation
- Innovation
