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17 Cards in this Set
- Front
- Back
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Define Economics
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Study of:-choices made to satisfy wants and needs, -process by which goods and services are produced, -govt plicies on economies and economic stability
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Define Scarcity
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Not being able to have all goods and services because there is not enough resources, all societies have scarcity
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Define Opportunity Cost
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The cost of the next best alternative use of money, time, or resources
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Define Tradeoffs
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Giving up something to get more of a different thing
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Explain the Idea of the Invisible Hand
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Companies and resource suppliers pursuing their self interest use most efficent process and further innovations. By doing that it promotes public interest (helps others)
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What is the importance of Adam Smith to Economics?
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Wrote the 'Wealth of Nations' in 1776 about the basc principles of economic and created the concept of the invisible hand.
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What does Ceteris Paribus mean?
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When measuring in economics one assumes that everything is staying the same except what is being measured.
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Explain the difference between positive and normaitive economics.
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Positive econ. is concerned with straight facts and Normative econ. is concerned with value and judgenments.
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What 3 questions must all economic systems answer?
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1)What to produce 2)How to produce it 3)For whom to produce
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Define Per-Unit Opportunity Cost
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(Units of goods or services lost)/(Units of goods or services produced)
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What are the characteristics of a Market System Economy
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Laissez Faire, individual decisions with free choice and enterprise
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What are the characteristics of a Command Economy
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Centralized decisions, usually by govt. Property is owned by society.
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What are the characteristics of a Traditional Economy
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Production methods, exchange and income distribution are sanctioned by custom
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What market system is the USA?
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A combo of free market and command, ppl and comanies act in their best interest w/o govt intereference and ownership of private property
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What is the difference between Microeconomics and Macro Economics?
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Microeconomics is the study of ppl and businesses w/in a single market Macroeconomics is the study of the whole market
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Define Markets
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A location or mechanism that allows buyers and sellers to deal readily in a certian economic product.
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What does a Market consist of?
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consumers, firms, and households
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