Flashcards To Learn Economics Chapter 1
Unlock all answers in this set
Unlock answersquestion
economics
answer
the commonsense science of how and why people, businesses, and governments make the choices they do.
question
insatiability
answer
the fact that everyone has unlimited wants
question
scarcity
answer
everything is finite, or limited in quantity
question
economic cost
answer
the value people place on a good or service, and that value, in turn, helps to determine the price of the good or service.
question
good
answer
any tangible thing that has a measurable lifespan
question
services
answer
intangible items
question
economic goods
answer
goods that bear a positive economic cost
question
economic services
answer
services that bear a positive economic cost
question
nuisance goods
answer
goods that a consumer pays to have removed and bear a negative economic cost
question
recycling
answer
the service of turning various nuisance goods into economic goods
question
free goods
answer
goods with a price tag of zero
question
free services
answer
services with a price tag of zero
question
diamond-water paradox
answer
the riddle that asks which is more valuable, a handful of diamonds or a glass or water, solved by Carl Menger in 1871 when he proposed that value is not inherent in an object but rather the buyer
question
intrinsic value
answer
the principle that holds that a thing is valuable because of the nature of the product, such as its scarcity or the amount of labor and natural resources that goes into its production.
question
subjective value
answer
it is an object's usefulness to the buyer that determines its worth
question
utility
answer
usefulness
question
opportunity benefit
answer
the satisfaction you receive from the choice you make
question
opportunity cost
answer
the satisfaction you give up or the regret you experience for not choosing differently
question
util
answer
an economic term for an imaginary unit of satisfaction
question
microeconomics
answer
deals with choices made by individual units: individual people, households, or businesses.
question
macroeconomics
answer
examines large-scale economic choices and issues.
question
positive economics
answer
the approach of observing economic choices and predicting economic events
question
normative economics
answer
making value judgments about existing or proposed economic policies
question
List three reasons that economics is considered a science.
answer
1. Observation:How or why a choice is made 2. Observations: To predict future cause-effect relationship, trends of the economy. 3. Attempt to control economy by manipulating key variables.
question
Why do instability and scarcity necessitate choice?
answer
everyone wants something, but if it's scarce it makes you choose if you actually need it.
question
From which language did the word "economics" originate, and what was its original meaning?
answer
Greek. Administration of/Rules of the house
question
How is it possible for a handful of diamonds to be worth less than a single glass of water?
answer
because of it's subjective value. If you are super dehydrated diamonds are not going to help you fix that.
question
What does an economist mean with the word utility?
answer
usefulness
question
Why would an unsaved person be inclined to consider economic a dismal science?
answer
because every decision brings regret.
