Economics- Unit 1 Study Guide – Flashcards
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Opportunity cost
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...The highest-valued alternative that must be given up to engage in an activity.
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scarcity
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lack of goods and resources to meet unlimited wants and needs.
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efficiency
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the ratio of the output to the input of any system
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goods
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...food, water, provisions, anything someone buys.
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trade-off
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...The idea that because of scarcity, producing more of one good or service means producing less of another good or service.
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production possibilities graph
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..., (economics) the ratio of the quantity and quality of units produced to the labor per unit of time
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service
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...actions or activities one person performs for another
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shortage
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...a situation in which a good or service is unavailable, or a situation which the quantity demanded is greater than the quantity provided also known as excess demand.
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underutilization
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...means using fewer resources than the economy is capable of using.
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labor
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...the effort that a person devotes to a task for which that person is paid
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factors of production
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...land, labor, and capital; the three groups of resources that are used to make all goods and services.
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standard of living
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the economic standard that most people live by. It is above poverty.
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economic system
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the branch of social science that deals with the production and distribution and consumption of goods and services and their management
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self-interest
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the interest people show in their work.
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safety net
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a guard by the government so the economy doesn't go under too quickly.
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communism
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..., a form of socialism that abolishes private ownership characterized by a centrally planned economy with all economic and political power resting in the hands of the central government.
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laissez-faire
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hands off policy of the government as it pertains to the economy
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collective
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set up on the principle of collectivism or ownership and production by the workers involved usually under the supervision of a government
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factor payments
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...The income people receive for supplying factors of production, land, labor, etc.
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gross domestic product
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The full amount on product that comes from the given economic year.
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free rider
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having no commitments or responsibilities
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public interest group
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...a private organization that tries to persuade public officials to act or vote according to the interests of the group's members.
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private sector
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...the part of the economy that involves transactions of individuals and businesses, would have little incentive to produce public goods.
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in-kind benefits
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...goods and services provided for free or at greatly reduced prices.
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macroeconomics
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...The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.
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poverty threshold
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...an income level below that which is needed to support families or households.
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market failure
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...a situation in which the market, on its own, does not distribute resources efficiently.
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welfare
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...is a general term that refers to government aid for the poor. It includes many types of redistribution programs.
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public disclosure laws
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...require companies to give consumers important information about their products
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land
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the term for natural resources.
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labor
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the amount of work someone puts into their job.
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capital
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..., wealth in the form of money or property owned by a person or business and human resources of economic value
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entrepreneur
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..., someone who organizes a business venture and assumes the risk for it
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"guns or butter"
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...a country's decision to produce more food, or more military goods
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centrally-planned
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...The central government alone decides how to answer all three key economic questions
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economy
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the system of production and distribution and consumption
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competition
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...the rivalry among sellers to attract customers while lowering costs.
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specialization
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...the concentration of the productive efforts of individuals and forms on a limited number of activities.
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incentives
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...the hope for reward and the fear of punishment that encourages a person to do something.
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Adam Smith
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a Scottish moral philosopher and a pioneer of political economy.
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traditional economy
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...relies on habit, custom or ritual to decide what to produce, how to produce it, and to distribute it.
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market economy
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...economic decisions are made by individuals and are based on exchange or trade.
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positive externality
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when an individual or firm making a decision does not receive the full benefit of the decision.
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negative externality
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occurs when an individual or firm making a decision does not have to pay the full cost of the decision.
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public good
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...a shared good or service for which it would be inefficient or impractical to make consumers pay.
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Social Security
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payment to old people, and insurance for the old people.
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former Soviet Union economy?
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communist
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United States economy?
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Market...
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China's economy?
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communist
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Cuba's economy?
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communist...
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North Korea's economy?
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communist...
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basic economic quesions-3
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...What good or service are you going to produce? For whom are you going to produce it? How are you going to produce your good or service?
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purpose of the production possibilities graph?
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...shows all combination of good and services that can be produced given the resources and technology of society.
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what does it mean to be an efficient economy?
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you make the borderline amount of goods that you are supposed to make that year.
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different types of economic systems?
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Market, Command, Traditional & Mixed Economic system.
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how do the consumers drive the economy?
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they pay for goods, thus paying the economy, and circulating more money.
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Business cycle
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...a period of macroeconomics expansion followed by a period of contraction or decline
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Impact of technology?
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...moves the ppf out
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Public good vs. Private good? (benefit to the whole society vs. individuals?)
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public good, everyone can buy. Private goods, only private business can buy.
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government intervention to provide for nees the market does not address?
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...
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microeconomics
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he study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
