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16 Cards in this Set
- Front
- Back
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economics |
textbook -study of sufficient use of scarce resources to achieve maximum satisfaction of economic wants basic- the science of scarcity |
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explain the principle of scarcity |
unlimited wants with limited resources |
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what is the difference between macro and microeconomics |
microeconomics is the study of small economic units such as individuals, firms, and industries macroeconomics is the study of a large economy as a whole |
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what are the 5 key economic assumptions |
scarcity- unlimited wants limited resources trade off- due to scarcity, choices must be made, every choice has a cost. Everyone’s goal is to make choices thatmaximize their satisfaction. Everyone acts in theirown “self-interest.”. Everyone makes decisions by comparing themarginal costs and marginal benefits of everychoice. Real-life situations can be explained andanalyzed through simplified models and graphs. |
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what is meant by thinking on the margin |
examination of additional benefits of an activity compared to the additional costs incurred |
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what is the difference between trade off and oportunity cost |
opportunity cost is the next best alternative when you make choice trade off is everything you give up when you make a choice |
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what is a consumer good |
goods bought and used by consumers rather than by manufacturers for producing other goods |
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what is a capital good |
goods that are used in producing other goods rather than being bought by consumers |
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explain the 4 factors of production |
land-all natural resources thatare used to produce goods and services labor any effort a person devotes to a task for which he is paid capital- any human made resources, skills, or knowledge used to create goods and services entrepreneurship- ambitious leaders that combine factors of production to create goods and services |
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what are the two types of capital? example. |
human and physical ex: education ex: factories1 |
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what are the 3 econommic questions every society must answer |
what to produce, how to produce it, who to produce for |
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how the 3 ecconomic questions are answered determines what? |
the economic system |
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describe the three economic systems. provide examples of each |
mixed economy-France command economy-China free market economy- the U.S. |
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what is an incentive. provide positive and negative examples |
a payment or concession to stimulate greater output of investment. positive example- your parents giving you money for making good grades negative example- someone giving you money to hurt someone |
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explain the economic principle of cost-benefit analysis |
systematic approach to estimating the strengths and weaknesses of alternatives |
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what is the purpose of a production possibilities curve? |
the diagram that shows how many units of two goods of services the nation can produce in one year if it uses its resources fully and efficiently |
