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Economics - Mr. Bono (Semester 2) > The Economic Way of Thinking > Flashcards

Flashcards in The Economic Way of Thinking Deck (44):
1

Consumers have 2 basic needs:

Wants
Needs

2

___ are desires that can be satisfied by consuming a good or service

Wants

3

___ are things such as food, clothing, and shelter, that are necessary for survival

Needs

4

___ is the situation that exists when there are not enough resources to meet human wants

Scarcity

5

___ is the study of how people choose to use scarce resources to satisfy their wants

Economics

6

___ is central to the use of scarce resources

Choice

7

___ are physical objects that can be purchased, such as food, clothing and furniture

Goods

8

___ is work that one person performs for another for payment

Services

9

___ is a person who buys goods or services for personal use

Consumer

10

___ is a person who makes goods or provides services

Producer

11

Scarcity requires 3 basic questions:

WHAT will be produced?
HOW will it be produced?
FOR WHOM will it be produced?

12

___ are those resources needed to produce goods and services

Factors of Production

13

Factors of production is divided into 4 categories:

Land
Labor
Capital
Entrepreneutship

14

The 4 factors have what in common?

Limited Supply

15

___ includes all the natural resources found on or under the ground that are used to produce goods and services

Land

16

___ is all the human time, effort, and talent that goes into the making of products

Labor

17

___ is all the producer's physical resources

Capital

18

Capital can also be known as ___ or ___

Physical Capital
Real Capital

19

Businesses invest in ___

Real Capital

20

Worker invest in ___

Human Capital

21

___ is the combination of vision, skill, ingenuity, and willingness to take risks that are needed to create and run a new business

Entrepreneurship

22

2 Factors that shape economic choices:

Incentives
Utilities

23

___ is the benefit or satisfaction received from using a good or service

Utility

24

to ___ means to make decisions according to the best combination of costs and benefits

Economize

25

___ is the alterternative you give up when you make an economic choice

Trade-Off

26

___ of a decision is the value of the next best alternative, or what you give up by choosing one alternative over another

Opportunity costs

27

___ is the practice of examining the costs and benefits of a choe as an aid to decision making

Cost-Benefit Analysis

28

___ shows what you would get and what you would give up when you make choices

The Decision Making Grid

29

___ is the additional cost of using one or more unit of a product

Marginal Cost

30

___ is the additional satisfaction from using one or more unit of a product

Marginal Benefit

31

In Economics, when we think of ___ we are thinking on a per unit basis

Margin

32

The ___ is a graph used by economists to show the impact of scarcity on an economy

PPF

33

What does PPF stand for?

Production Possibilities Frontier

34

The PPF is based on 4 assumptions that simplify economic interactions:

Resources are fixed
All resources are fully employed
Only 2 things can be produced
Technology is fixed

35

___ is a latin phrase used in economics to mean all other things being held equal or constant.

Ceteris Paribusis

36

The PPF represents the border between ___ and ___

Possible
Not Possible

37

___ is the condition in which economic resources are not being used to produce the maximum amount of goods and services

Efficiency

38

___ is the condition in which economic resources are not being used to their full potential

Underutilization

39

___ states that as production switches from one product to another, increased amounts of resources are needed to increase the production of the second part

The Law of Increasing Opportunity Costs

40

___ means you can't get anymore of something

Fixed

41

Anything that causes economic output to increase or decrease will cause the curve to ___

Shift

42

Examples of outward shifts

Economic Growth
Technology

43

Examples of inward shifts

Natural Disasters
War/Plague

44

Technology replaces

Entrepreneurship