Economics Test 1 Summer Session

Front 1

Unproven,
Predict Behavior and Relationships

Back 1

THEORY

Front 2

Simplified & Real
Give real valid predictions

Back 2

MODEL

Front 3

Nothing changes but the factors at hand

Back 3

CETERIS PARIBUS ASSUMPTION

Front 4

Emphasizes psychological limitations and complications (money, education, values)

Back 4

BEHAVIORAL ECONOMICS

Front 5

People are nearly but not fully rational so they can not predict every possible choice

Back 5

BOUNDED ECONOMICS

Front 6

Strictly limited to descriptive statements

Back 6

POSITIVE ECONOMICS

Front 7

If A then B

Back 7

POSITIVE ECONOMICS

Front 8

Value judgements, relates to whether things are good or bad

Back 8

NORMATIVE ECONOMICS

Front 9

Lowering the price is good but people are going to get fat

Back 9

NORMATIVE ECONOMICS

Front 10

Positive slope, supply curve

Back 10

DIRECT RELATIONSHIP

Front 11

Negative Slope, demand curve

Back 11

INVERSE RELATIONSHIP

Front 12

change in y / change in x

Back 12

SLOPE

Front 13

When ingredients to produce wants/needs are insufficient to satisfy

Back 13

SCARCITY

Front 14

Affects the rich and the poor

Back 14

SCARCITY

Front 15

Not having the resources to fulfill our wants (money, transportation)

Back 15

POVERTY

Front 16

Occur in limited quantities
(Air, water, oil, land)

Back 16

NATURAL RESOURCES

Front 17

The productive contributions of labor

Back 17

LABOR

Front 18

Ballet Dancer, Pro sports player

Back 18

LABOR

Front 19

All manufactured resources
(Buildings, machines, improvements to land)

Back 19

PHYSICAL CAPITAL

Front 20

Accumulated training and education of workers

Back 20

HUMAN CAPITAL

Front 21

Having the best Neurosurgeon would increase your. . .

Back 21

HUMAN CAPITAL

Front 22

Innovation, new ways of doing things

Back 22

ENTREPRENEURSHIP

Front 23

bring individuals satisfaction or happiness, satisfy a want or need

Back 23

GOODS

Front 24

things that are scarce and have value, you cant walk outside and find them

Back 24

ECONOMIC GOOD

Front 25

A desire

Back 25

WANT

Front 26

A necessity, indefinable

Back 26

NEED

Front 27

Any lost opportunity

Back 27

COST

Front 28

Next best alternative, what was foregone, can include time

Back 28

OPPORTUNITY COST

Front 29

The pool of applied knowledge

Back 29

TECHNOLOGY

Front 30

The barista, the espresso machine and the manager are all . . .

Back 30

TECHNOLOGY

Front 31

Goods produced to produce other goods

Back 31

CAPITAL GOODS

Front 32

Use of goods and services for personal satisfaction

Back 32

CONSUMPTION

Front 33

When outputs are produced at minimum cost

Back 33

EFFICIENCY

Front 34

Leads to specialization

Back 34

COMPARATIVE ADVANTAGE

Front 35

Having a lower opportunity cost than other producers

Back 35

COMPARATIVE ADVANTAGE

Front 36

Having the same production with less resources than other producers

Back 36

ABSOLUTE ADVANTAGE

Front 37

How much of a good or service people will purchase at a price during a specified time

Back 37

DEMAND

Front 38

Have a direct relationship
As income increases demand does too

Back 38

NORMAL GOODS

Front 39

Have an indirect relationship
as income increases demand does not

Back 39

INFERIOR GOODS

Front 40

Qd = Qs

Back 40

EQUILIBRIUM

Front 41

The responsiveness to the Qd of a commodity as it changes its price

Back 41

PRICE ELASTICITY OF DEMAND

Front 42

Artificially set prices at a minimum.

Back 42

PRICE FLOOR

Front 43

Artificially set prices to a maximum

Back 43

PRICE CELING

Front 44

There is a surplus because so the government buys lots of wheat. This is an example of the

Back 44

PRICE FLOOR

Front 45

The demand schedule assumes that people are

Back 45

WILLING AND ABLE TO PURCHASE