micro chapter 1 – Flashcards
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Economics
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A fundamental fact dominates our lives:We want more than we can get
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Scarcity
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Our inability to satisfy all our wants
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incentive
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a reward that encourages an action or a penalty that discourages one
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Economics
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the social science that studies the choices that individuals, business, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices
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micro
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the study of the choices that individuals and businesses make, the way these choices interact in market, and the influence of governments
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macro
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the study of the performance of the national economy and the global economy
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good and services
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the objects that people value and produce to satisfy human wants
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factors of production
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the productive resource used to produce goods and services : 1- land 2- labour 3- capital 4-Entrepreneurship
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land
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the" gifts of nature" that we use to produce goods and services
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labour
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the work time and work effort that people devote to producing goods and services
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human capital
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the knowledge and skill that people obtain from education, on- the- job training. and work experience
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capital
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the tools, equipment, buildings, and other construction that businesses use to produce goods and services
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entrepreneurship
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the human resource that organises the other three factors of production: labour, land, and capital
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rent: wages: interest: profit:
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the income that land earns the income that labour earns the income that capital earns the income earned by entrepreneurship
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self-interest
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the choices that you think are the best ones available for you are choices made in your self interest
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Efficient
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resource use is efficient if it is not possible to make someone better off without making someone else worse off
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social interest issues
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1-Globalisation 2- Information-age monopolise 3-Climate change 4- Economic instability
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Globalisation
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expansion of international trade, borrowing and lending and investment
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The resources that are used to produce goods and services - _____ are factors of production.
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land, labour, capital, and entrepreneurship
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Land is the _____ that we use to produce goods and services
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gifts of nature or natural resources
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the_______ that people devote to produce goods and services is labour
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work time, and work effort
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Human capital _____ that people obtain from education, on-the-job training, and work experience. _____ that have been produced in the past and that businesses now use to produce goods and services is capital.
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. is the knowledge and skill; Tools, instruments, machines, buildings, and other item
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Rent is the income paid for the use of _____. Wages are income paid for the services of _____. Profit (or loss) is the _____ earned by an entrepreneur for running a business. Interest is the income paid for the use of _____.
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land; labour; income; capital
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_____, is an example of a choice in the self-interest. _____, is an example of a choice in the social interest.
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I buy Pizza collecting funds
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Which of the following illustrates an efficient outcomeWhich of the following illustrates an efficient outcome
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If Ted cuts the price of his sausages and his profit increases, Ted and his customers are better off. That is an efficient outcome
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economic way of the thinking
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-A choice is a tradeoff - people make rational choices by comparing benefits and costs -benefits is what you gain from something - cost is what you must give up to get something - most choices are how-much choices made at the margin - choices respond to incentives
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tradeoff
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a constraint that that involves giving up one thing to get something else
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rational choice
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a choice that compares costs and benefits and achieves the greatest benefits over cost for the person making the choice
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benefits
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something is the gain or pleasure that it brings and is determined by preference : a description of a person's likes and dislike and intensity of those feeling
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opportunity cost
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the highest valued alternative that we must give up to get something
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Margin
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when a choice is made by comparing a tittle more of something with its cost, the choice is made at the margin
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marginal benefits
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a person receives from consuming one more unit of a good or service. it is measured as the maximum amount that a person is willing to pay for one more unit of the good or service
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Which of the following illustrates a tradeoff?
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I will study for my exam instead of going to the movie tonight.
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Rational choice is a choice that uses the available resources to _____ of the person making the choice.
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best achieve the objective
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the benefit of something is the _____. Benefit is determined by preferenceslong dash—by what a person _____ and the intensity of those feelings.
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ain or pleasure it brings; likes and dislikes
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Which of the following is the opportunity cost of attending a ball game?
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the things you would have bought with what you spent on the ticket and bus fare getting to the game plus the things you would alternatively have done with your time.
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A choice on the margin is a choice that is made by comparing all the relevant _____ systematically and _____. Marginal cost is the _____ that arises from one unit _____ in an activity. Marginal benefit is the _____ that arises from one unit _____ in an activity
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alternatives, incrementally opportunity cost, increase benefit ,increase
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positive stamens In economics as social science and policy tool
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is says what(believed about the way the world operates( might be right or wrong)
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normative statements
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what need to be. it depends on values and cannot be tested police goals are normative
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unscrambling cause and effect
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buy more because it is cheaper
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economic model
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description of some aspect of the economics world that include only those features of the world that are needed for the purpose at hand
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An economic model is a description of some features of the economic world that includes _____ features assumed necessary to explain the _____facts.
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only those observed
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Scatter diagram
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a graph that plots the value of one variable against the value of another variable for a number of different values of each variables
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econmics model in Graphs
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stripped-down, simplified description of an economy or of component of economy such brassiness or a stakeholders
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patterns to look four in graphs
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-Variables move in the same direction -variables move in opposite direction -variables have maximum or a minimum -variables are unrelated
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positive relationship ,direct relationship
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relationship two Variables move in the same direction
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linear relationship
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relationship two Variables that is illustrated by a straight line
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positive relationship ,direct realtionship
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linear relationship, steeper, less steep
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negative relationship inverse relationship
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relationship two Variables move in the opposite direction (N liner, less steep. sleeper
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maximum minimum
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+then equall then - -then equal then +
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unrelated
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straight line in y or X
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slope
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the change in the value of the variable mesured on the y-axis divided by the change in the value of the variable measured on the x-axis positive slope نقطةالمسطح x نقطة المسطح y negative slop نزول نقطةالمسطح x نقطة المسطح y slope point النحني
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ceterise paribus
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other things being equal == all other relevant things reaming the same
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linear equation
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y= a+bx
