Economics Flashcards
(29 cards)
What is a need?
Something essential for survival or a stable and healthy life. Examples include food, water, clothing, and shelter.
What is a want?
A desire for goods or services that are not essential for survival, but rather things that are desired.
Acronym for the 4 resources?
CELL
What is this resource - Capital?
The financial assets, resources, and property used to generate income or create value. EX: tools, machinery, cash
What is this resource - Enterprise?
An organizational unit producing goods or services which has a certain degree of autonomy in decision-making. EX: corporations, institutions
What is this resource - Land?
The natural resources used in production. EX: gas, water, electricity
What is this resource - Labour?
The human effort used in the production of goods and services, from physical to mental work. EX: builders, designers, electrician
What is a traditional market?
Market based on the trading of goods or services, very old and satisfies only basic needs.
What is a planned market?
An economic system where the government controls and directs all economic activity, rather than relying on market forces like supply and demand
What is a free market?
System where prices of goods and services are determined by supply and demand, with little to no government intervention. Allows for competition because anyone can start a business.
What is a mixed market?
System that combines aspects of capitalism and socialism.
What is opportunity cost?
The value of the best alternative that is given up when making a choice. It represents the potential benefits lost by choosing one option over another, especially when resources are limited.
What is a cost benefit analysis?
A systematic process of evaluating the costs and benefits of a project, policy, or program.
Describe the circular nature of the economy?
A circular flow economy model describes the course of money spent in a region, and how it benefits that area. EX: people are paid, and they spend that money elsewhere, ultimately contributing to the economic cycle.
What is supply?
Refers to the quantity of a good or service that producers are willing and able to offer for sale at a given price, within a specific time period.
What is demand?
Quantity of a good or service that consumers are willing and able to purchase at various prices, given a specific time period
What is GDP?
Gross Domestic Product. Measure of a country’s economic activity, representing the total market value of all final goods and services produced within its borders per annum.
Why is job loss and unemployment bad?
People earn less, and become more hesitant to spend money, which over time will cause a recession, as cash flow stops circulating.
What is inflation
Increase in the level of prices of the goods and services that households typically buy
What is deflation?
General decline in the price level of goods and services
Why is deflation so much worse than inflation?
Can lead to a cycle of decreasing demand, lower production, and even wage cuts, potentially leading to prolonged economic downturns and high unemployment
What are interest rates?
The cost of debt for the person borrowing and the rate of return for the lender.
What are tariffs?
A tariff is a tax imposed by a government on goods imported from other countries. Price increase on imported goods, which can make them more expensive for consumers and businesses.
Why should you not eat beef wellington?
Erin Patterson poisoned one with death cap mushrooms.
