Ch. 1-2

Front 1

inputs

Back 1

a scarce resource used in the production process: also known as a factors of production and are divided into three basic categories land, labor and capital

Front 2

outputs

Back 2

goods or services generated by the production process

Front 3

economic enigmas and example

Back 3

mysterious or intresting question that econmist try o figure out by using econmic analysis
ex: puzzle or riddles solved econmic analysis

Front 4

resource and ex

Back 4

anything used to promote a econmic good or service
Ex: Limited or scarce usually not enough workers, minerals or machines to supply unlimited wants

Front 5

microeconmics and ex

Back 5

Look at econmic descisions making by individuals, households and businesses
Ex: Ford laying off workers

Front 6

macroeconmics and ex

Back 6

focus on economy as a whole
ex: country: unemployment rises

Front 7

scarcity

Back 7

the condition that results because people have unlimited needs and wants but limited resources. Scarity is forever
ex: we will have to make choices for what we want
"No Free Lunch Principle"

Front 8

tradeoffs

Back 8

choosing one thing over another
ex: you're giving up one thing to get another tha you want even more

Front 9

cost-benifit analysis and example

Back 9

to get anything we most use energy, time or resources(cost), we recieve something in return tha benifits us comfort, happiness or gratification (benifits), cost benefit is when we weigh one against the other

ex: all mone in world but time costs

Front 10

marginal costs and marginal benifits (Thinking at the Margins) and ex

Back 10

marginal costs is what you give up to add one more unit of activity, marginal benefit is when you gain from adding one unit

ex: Most descisions involve small amounts of time and money; Sandwich vs. Salad

Front 11

incentives and example

Back 11

things that motivate people to behave in a certain way. Most of us respond well to incentives
Ex: work hard in school, recieve scholarship

Front 12

market

Back 12

Most efficent way of cordinating trade or exchanges. Arrangements that bringd buyers and sekkers together. To stay markets cordinate simply means that buyers and sellers will behave in ways that are benifical to them. Adam Smith called this the invisible hand, arguing gov't should exercise little control

Front 13

invisible hand and ex

Back 13

metaphor used by Adam SMith dealing with how an invisible hand guided human affairs to explain how markets cordinate exchanges between buyers and sellers

ex: fresh mango's from mexico, shrimp from Thailand

Front 14

variable and ex

Back 14

quanity that can vary or change

ex: one or bth sets of data aee also known as variables

Front 15

rational behavior model and ex

Back 15

people behave in ways that are based on reason and that will fufill their wants and needs in other words, they'll act in accordance w/ their own self intrests regardless of their impact on oths

ex: econmic models inculde supply and demand theories of competion, etc.. All models arebased in certain assuption and merits be viewed with level of skepticism

Front 16

goods an ex

Back 16

physical objects, taniable products that a person can use

ex: cell phones, cupcakes,etc..

Front 17

services and ex

Back 17

things that are done by others
Ex: massage, haircut, someone moving lawn

Front 18

shortage and ex

Back 18

refers to a situation when there is not enough of goods or services to meet the demands

ex: shortage reasons inculde trends, wars, natural disaters, political instability, etc..Theyre usually temporary

ex: goods and services are scarce b/c people/materials are scarce

Front 19

4 factors of production

Back 19

1. Enterprenuers are defined as risk takers that devolp ideas for products & create goods/services
2. Land (Natural resources) inculde anything from the natural world that can be used to create a product. Ex: Trees for use furniture, papers, etc..
3. Labor refers to the people who devote their time into planning & physically carrying out work, your employees. Human capital refers to the experince education. Level & skill level people of country have Not suprisingly countries with high levels of human capital tend to have higher living standards
4. Capital refers to the tools machines and technolgy needed to create goods and services. Finacial captial is the money to invst in a businesses, whereas physical capital or capital goofd speak more of goods your tanigble equipment needed to make.

Front 20

renewable and example

Back 20

things that can be replaced
ex: Fish and forests

Front 21

nonrenewable example

Back 21

resources that are limited and will one day run out
ex: oil and coal

Front 22

perpetual resoures and examples

Back 22

things that are infinite with no danger of being used up
ex: sun and wind

Front 23

productivity and ex

Back 23

output divided by input
refers to the measure of outputper units of input
ex otherwords how many more car parts does a factory produce by adding extra workers or keeping workers an extra hour

Front 24

opportunity costs and ex

Back 24

the value of the next best alternative that you have chosen when you make a descisions

ex friday night, movies or skating if you go to the movies, skating was an opportunity cost

Front 25

utility and ex

Back 25

refers to extra satisfactions or pleasured you get from one additional good or service. Ex: One snicker=Happy tummy, one king size snickers=very happy tummy
negative- when you no longer gain adittional pleasure from adittional goods or services. Ex: Eat 5 snickers+sick tummy

Front 26

law of dimishing marginal utility

Back 26

says that a quantity of a good increase at a certain point and the marginal ultitlty of each additional unit will begin to decrease
ex: moe we consume of soethng the less satisfaction we wil get from it
eating slice 1 very high utlity sliceten negative utility

Front 27

production possibilities frontier

Back 27

economic model that shows the combinations of goods that can be produced by an economy. It's useful in allowing us to see tradeoffs

Front 28

efficiency

Back 28

refers to using resources in a way that produces the maximum amount of goods and services. Each point on a production possibilities frontier represents a possible combination. On these graphs if a data point is to the left of the curve it means productivity is impossible or unattainable

Front 29

3 key reasons an economy might not be at full capacity

Back 29

1. old technology and equipment
2. Untrained/Unproductive workers
3. Poor Geography (Unproductive Land, factories in remote locations, etc..

Front 30

scarcity forces tradeoff and example

Back 30

scarcity simply means there is an unlimited amount of resources to go around. Therfore, we m offers we choose one thing over another. No free lunch principle nothing in life is ever free. either you pay for it later or someone else pays for itake trad

Front 31

cost vs benefits and ex

Back 31

to get anything we must use time, energy, or resources ) and we receive something in return that brings us comfort. happiness. or gratification. cost benefit analysis is when weigh one against the other
ex: all the money in the world but only 24 hours in a day (time still costs)

Front 32

thinking at the margins

Back 32

most of our decisions involve a small amounts of time and money. Marginal cost is what you give up to add one more unit of activity. Marginal benefits is what you gain from adding one unit.

Front 33

incentives matter

Back 33

things that motivate people to behave in a certain way. Most of us respond well to incentives

ex: work hard in school, receive scholarship

Front 34

trade makes people better

Back 34

nobody is an expert at everything. Trading to get the goods or services we need from people who make or do those things well make our lives easier

Front 35

market coordinate trade

Back 35

most efficient a market is an economic arrangement that brings buyers and sellers together. It could be your local farmers market, could be your internet. To say markets coordinate trade simply mean that buyers and sellers will behave in ways that are beneficial to them. Adam Smith called this the invisible hand, arguing that the gov't should exercise little control over the market

Front 36

future consequences count

Back 36

though most of us are shortsighted and look to our immediate gratification economists want to look down the road at long term impacts of our decisions.
EX: Paying for ticket now, insurance goes up later
The Law of unintended consequences say that there will always be unexpected outcomes
Ex: Nebraska banning billboards advertisement in form of ugly statues

Front 37

scientific method

Back 37

1. Ask a question
2. Research the question
3. Develop a hypothesis
4. Conduct a study and collect the data
5. Analyze the data
6. Evaluate the hypothesis

Front 38

graphs

Back 38

visual representation on 2 sets of data. The info in the set of data are known as variables, factors may change

Front 39

x/y axis

Back 39

the lines of the graph are he x axis which run across the bottom and the y axis which runs vertically along the side. This line is connecting the dots on a graph known as the curves

Front 40

disadvantage for economists

Back 40

Unlike a scientist who can conduct an experiment in a lab economists work in the real world so they must take advantage of opportunities for natural experiments such as shifting gas prices, fluctuating unemployment levels,etc....

Front 41

economic model

Back 41

simplified representation of reality that allows economist to test variables.. they usually come in the form of an equation, a theory or a law

Front 42

rational behavior theory

Back 42

People behave I ways that are based on reason and that will fulfill their impacts that they may have on others.
Other economic models include supply and demand, theories of completion, etc...
All models are based on certain assumptions and must be viewed with a level of skepticism

Front 43

what do PPF's show

Back 43

Production possibility of two goods/services because of this it's reasonably easy to determine opportunity cost, simply by reading the graph

Front 44

What shape are PPF's not always

Back 44

PPFs can show a curve displaying the production possibilities at total efficiency. Any point under the curve shows inefficient production and any point outside of the curve shows impossible production

Front 45

what happens when the PPF shifts right

Back 45

indicates economic growth

Front 46

what happens which a PPF shifts to the left

Back 46

productivity falls and unemployment rises, living standards decline

Front 47

simplest form of production equation

Back 47

land + labor + capital= goods and services