Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

60 Cards in this Set

  • Front
  • Back
comparative cost
the amt the production of one product must be reduced to increas the production of another product
one or several events bring about or result in another event
resource market
a market in which households sell and firms buy the services of resources
ceteris paribus or other things being equal assumption
assume all other variables except those under immediate consideration are held constant
product market
a market in which firms sell and households buy the products they have produced
significant points for economic goals:
1. Interpretation
2. Complementary
3. Conflicting
4. Priorities
mechanism or arrangement which brings buyers or "demanders" and sellers or "suppliers" of a good or service into contact with one another.
policy economics
the formulation of courses of action to bring about desired results or to prevent undesired occurences ( to control economic events)
self interest
primary driving force of capitalism
pitfalls to objective thinking
1. bias
2. loaded terminology
3. definitions
4. fallacy of composition- cant assume what is true for the individual is true for the whole
5. Cause and Effect: Post Hoc Fallacy- if A happens,and then B happens, A causes B isnt neccessarily true
1. presence of large #s of independently acting buyers and sellers operating in the market for any particular product or resource.
2. the freedom of buys and sellers to enter and leave particular markets
specific economic units
medium of exchange
ie money
formulating economic policy
1. stating goals
2. policy options-choose methods to acheive goals
3. evaluation-review experiences and evaluate effectiveness.
comparative advantage
a lower relative or comparative cost than another producer
laws, theories, principles and models are all same the thing
terms of trade
do better through trade than they can at home--the rate at which units of one product can be exchanged for units of another product; the price of a good or serivce; the amt of one good or service that must be given up to obtain one unit of another good or service
post hoc, ergo propter hoc, or ater this, therefore because of this, fallacy
if A happens,and then B happens, A causes B isnt neccessarily true
capital goods
satisfy consumer wants indirectly by permitting more efficent production of consumer goods.
economic theory
deriving economic principles from relevant economic facts
private ownership of resources and the use of a system of markets and prices to coordinate and driect economic activity-motivated by self interest.
two sets of data are associated in some systematic and dependable way--not causation--ex. when x increases Y increases. but x's increase isnt necessarily the cause of y's increase. the relationship cou.ld be purely coincidental or determined by another factor Z, not included in analysis
productive efficiency
the least costly production techiniques are used to produce wanted goods and services.
descriptive or empirical economics
the gathering or collection of relevant economic facts (data)
authoritarian capitalism
hitler, govt control, but property privately owned.
positive economics
FACTS! scientific statements about economic behavior
full production
all employed resouces should be used to make the most valued contributions to the domestic output
distills or creates principles from facts--a method of reasoning that proceeds from facts to generalization.
market socialism
yugoslavia, public ownership of resources, increasing reliance on free markets to organize and coordinate economic activity.
economic principles are imprecise quantitative statements
scarce resources
1. land-"gifts of nature"
2. capital-investment goods, facilitates in production of consumer goods
4.entrepreneurial ability--innovator,risk taker, driving force, sets policy
normative economics
OPINION--what is recommended
private property
right to bequeath
economic goals
1.economic growth-higher standard of living
2.full employment
3.economic efficiency-maximum benefits, minimal cost
4.price level stability
5.economic freedom equitable distribution of income
7.economic security-provisions for those unable to earn minimum income
8.balance of trade
full employment
all available resources should be employed
economy as a whole
public ownership of virtually all property resources and the rendering of economic desicions thourgh central economic planning
all factors of production have one thing in common
scarce or limited in supply
traditional or customary economy
bartering, ect.
the process of producing and purchasing capital goods
freedom of enterprise
under pure capitalism, private business enterprises are free to obtain economic resources, to organize these resources in the production of a good or service of the firm's own choosing, and to sell it in the markets of their choice.
allocative efficiency
resources are devoted to goods most wanted by society
trade deficit
imports are greater than exports
full employment
all available resources should be employed
trade surplus
exports are greater than imports
pleasure or satisfaction
freedom of choice
owners of property resources and money capital can employ or dispose of these resources as they see fit; laborers are free to enter any lines of work; free to buy whatever they want
economizing problem
1. society's material wants are unlimited and insatiable
2. economic resources-the means of producing goods and services- are limited or scarce
dependent variable (effect)????
consumer goods
directly satisfy the consumer wants
do not mirror the full complexity of reality
opportunity cost
the amount of other products which must be forgone or sacrificed to obtain some amount of any given product is called the opportunity cost of that good.
the economic perspective
cost benefit perspective; helps us analyze everyday behavior of individuals and institutions.
economic growth
the ability to produce a larger total output-is refelcted in a rightward shift of the production possibilities curve; it is the result of increase in resource supplies, improvements in resource quality, and technological progress
independent variable (cause)????
the downward slope of the curve implies the notion of
opportunity costs
begin with a theory and proceed to the verification or rejection of this theory by an appeal to the facts
the concavity of the curve reveals
increasing opportunity costs
observation, insight, logic, intuition to form an untested principle
Growing economy
1. expanding resouces supplies
2. technological advance
3.present choices, future possibilities