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24 Cards in this Set

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  • Back
economics
study of how scarce resources are allocated among competing uses
scarcity
there are not enough resources available to produce and consume all the goods and services we desires
microeconomics
the study of how individual consumers or households interact with firms in markets

- how firms use resouces and how indeividual workers decide how much time to alocate to labor
macroeconomics
study of the major spending and producing units in the economy
positive economic analysis
type of economic analysis that involves "what is", or purely objective relationships that can be tested with data

- cheapest airfare
- what would happen if 100,000 loan increase by 1%
normative economic analysis
type of economic analysis often can be described as "what ought to be". normative economic analysis is subjective

should we subsideize the medical bills of low income patients

should the government adopt policies that cause hardship
economic system
sets the basic ground rules for consumer and producer interactions
goods and services
all those resources and activities that consumers, firms, and the governement consider valuable
market based system
allocates goods and services based on prices. prices are are determined by the forces of supply and demand
demand driven economy
producers respond to the desires of consumers, rather than forcing consumers to mold their choices to what firms want to produce
normative economic analysis
type of economic analysis often can be described as "what ought to be". normative economic analysis is subjective

should we subsideize the medical bills of low income patients

should the government adopt policies that cause hardship
economic system
sets the basic ground rules for consumer and producer interactions
goods and services
all those resources and activities that consumers, firms, and the governement consider valuable
market based system
allocates goods and services based on prices. prices are are determined by the forces of supply and demand
demand driven economy
producers respond to the desires of consumers, rather than forcing consumers to mold their choices to what firms want to produce
rational self interest
consumers endeavor to make choices that give them the greatest satisfaction
mixed economy
most goods and services are allocated using markets, but some goods and services are allocated by the government
centrally planned economy
the government, rather than the market, allocates resources
transition economy
economies in the process of switching from an allocation scheme that relies on central planning to one that uses markets
opportunity cost
the value of the most desired alternative you forgo in order to obtain a good or service or under take another activity

you took history so the oppurtunity cost is biology
cost-benefit analysis
systematically compares the costs and benefits of an activity to determine whether it should be pursued and, if so, the extent to which it should be pursued
marginal cost
the cost of consuming or producing that additional unit compared to marginal benefit
marginal benefit
benefit associated with consuming or producing one more unit
economic model
tools that economists use to understand and explain economic events and to predict the outcome of economic actions