INTRO TO ECON

Question 1

The word economy comes from the Greek

Answer 1

oikonomia, management of the household

Question 2

Father of Modern Economics

Answer 2

adam smith, wrote the book an inquiry into the wealth of nations”

Question 3

what is economics

Answer 3

study of how society manages its scarce resources to produce goods and services to satisfy unlimited wants

Question 4

two main branches of economics

Answer 4

microeconomics and macroeconomics

Question 5

firms, industry, market, supply demand

Answer 5

microeconomics

Question 6

types of economic statements

Answer 6

positive economics and normative economics

Question 7

this refers to a tool used by economists to
explain economic phenomena. It uses assumptions to
simplify reality.

Answer 7

model

Question 8

This is an explanation of why-things are as
they are.

Answer 8

theory

Question 9

is a conjecture/ proposition that is
subjected to empirical verification.

Answer 9

hypothesis

Question 10

is experienced when firms are able to reduce
the per unit cost of producing the output. In simple
terms, the firm maximizes the output at lowest
possible cost.

Answer 10

economic efficiency

Question 11

refer to tangible and intangible things that
can satisfy human wants.

Answer 11

goods

Question 12

types of goods

Answer 12

free goods and economic goods

Question 13

types of economic goods

Answer 13

finished/semi-finished products

Question 14

factors of production

Answer 14

land, labor, entrepreneurship, capital

Question 15

a simple depiction of the macroeconomy

Answer 15

circular flow diagram

Question 16

illustrates GDP as spending, revenue,
factor payments, and income (FIRS)

Answer 16

GDP

Question 17

own the factors of production,
sell/rent them to firms for income
▪ buy and consume goods & services

Answer 17

household

Question 18

buy/hire factors of production,
use them to produce goods
and services
▪ sell goods & services

Answer 18

firms

Question 19

What the Diagram Omits? (FFG)

Answer 19

financial system, foreign sector, government

Question 20

10 principles of economic

Answer 20

How people make decisions
1. People face trade-offs
2. the cost of something is what u give up to get it
3. rational people think at a margin
4. people respond to incentives

how people interact
5. trade can make everyone better off
6. markets are usually a good way to organie economic activity
7. government can sometimes improve market outcomes

how economy works as a whole
8. Country’s Standard of Living
Depends on Its Ability to Produce Goods
and Service
9. price rise when the government prints too much money
10. society faces a short-run face-off between inflation and unemployment

Question 21

 means that society is getting the maximum benefits from its
scarce resources.

Answer 21

efficiency

Question 22

benefits are distributed uniformly among
society’s members.

Answer 22

equality

Question 23

This refers to what you give up to get that item or option.

Answer 23

opportunity cost

Question 24

making decisions requires
comparing the costs and benefits of alternative courses of
action.

Answer 24

principle 2

Question 25

 people who systematically and purposefully do the best they can to achieve their objectives.

Answer 25

rational people

Question 26

a small incremental adjustment to a plan of action

Answer 26

marginal change

Question 27

something that induces a person to act (e.g. rewards or punishments)

Answer 27

incentive

Question 28

a group of buyers and sellers

Answer 28

market

Question 29

“Organize economic activity” means determining

Answer 29

what, how, how much, who

Question 30

an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

Answer 30

market economy

Question 31

what is the famous insight of adam smith in thhe wealth of nations

Answer 31

Each of these households and firms acts as if “led by an invisible hand” to promote general economic well-being.

Question 32

 Important role for government:

Answer 32

enforce property rights promote social welfare ppl are less inclined to work, invest, purchase if large risk of their property being stolen

Question 33

the ability of an individual to own and exercise control over scarce resources

Answer 33

property rights

Question 34

a situation in which a market left on its own fails to allocate resources efficiently.

Answer 34

market failure

Question 35

the impact of one person’s actions on the well-being of a bystander

Answer 35

externality

Question 36

the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices

Answer 36

market power

Question 37

the amount of goods and services produced per unit of labor.

Answer 37

productivity

Question 38

increases in the general level of prices.

Answer 38

inflation

Question 39

fluctuations in economic activity, such as employment and production

Answer 39

business cycle

Question 40

The process of improving the quality of all human lives and capabilities by raising people’s levels of living, self- esteem, and freedom.

Answer 40

development

Question 41

the study of the allocation of scarce resources which have alternative uses to produce goods and services to satisfy unlimited human wants.

Answer 41

economics

Question 42

study of how economies are transformed from stagnation to growth and from low-income to high-income status, and overcome problems of absolute poverty.

Answer 42

development economics

Question 43

rates of growth of income per capita  Gross national income (GNI) (monetary growth of GNI per capita minus the rate of inflation)  Gross Domestic produce

Answer 43

traditional economic measures

Question 44

Three Core values of Development

Answer 44

SSF sustenance self esteem freedom from servitude

Question 45

Three Main objectives of Development

Answer 45

 To increase the availability and widen the distribution of basic life-sustaining goods.  To raise levels of living.  To expand the range of economic and social choices.

Question 46

Basic Indicators of Development

Answer 46

HER health education real income

Question 47

- An index measuring national socioeconomic development, based on combining measures of education, health, and adjusted real income per capita.

Answer 47

human development index