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33 Cards in this Set
- Front
- Back
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Goods and Services Productive Resources |
Labor Managerial Talent Technology Land Natural Resources |
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Land |
Provides for food grown on farms with technology |
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Scarcity & Choice |
Limited goods and services restricts options and choices |
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Opportunity Cost |
A decision to use resources in one way prohibits it from being used in another opportunity |
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Rational Self Interest |
Individuals pursue opportunities to increase their utility |
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Utility |
Pleasure or happiness from consuming a product or service |
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Marginal Analysis |
Compares benefit and cost resulting in a marginal or extra change |
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Scientific Model |
1. Observe real behavior and outcome 2. Hypothesis 3. Test hypothesis 4. Accept/Reject/Modify hypothesis 5. Continue to test hypothesis |
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Theories of Behavior |
1. Develop on individuals 2. Institutions 3. 1 & 2 are engaged in production, consumption, or exchange of goods 4. Economic principles based on generalization relating to economic behavior |
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Micro |
Decision making by individual consumer, industry, or business firm |
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Macro |
Examines the economy as a whole or its sub divisions |
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Positive (Economist) |
Describes what is and the cause of it (Factual based analysis) |
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Normative Economics |
Economic policy which incorporates judgement about what the economy should be like or what particular policy actions should be recommended to achieve the desired goal |
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Opportunity Cost |
People choose and incur the value of the next best option |
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Supply & Demand |
Need to make decisions because wants exceed the means
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Limited Income |
Forces Decision |
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Types of Income |
1. Wages 2. Interest 3. Dividends 4. Rental 5. Trust |
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Goods |
Products produced to satisfy our needs and utilities |
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Services |
Actions for which we pay income |
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Utility |
Satisfy consumer needs from the purchase of demands for goods and services |
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Budget Line (or Constraint) |
Shows the relationship between 2 products |
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Straight Line |
Shows constant opportunity cost for both goods
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Full Employement |
Employing all or less than full employment determine the production level |
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Fixed Resources |
Quantity and quality of production are fixed |
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Fixed Technology |
The technology available at the time of production |
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Consumer |
Satisfies needs directly |
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Capital |
Satisfies needs indirectly |
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Law of Increasing Opportunity |
The production of a particular good increases, the opportunity cost of producing an additional unit rises |
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Economic Resources |
1. Land 2. Labor 3. Capital 4. Entrepreneurial Ability |
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Economics |
The social science that explains how individuals, institutions, and society make and opportunity cost decision |
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Economic Perspective |
1. Scarcity 2. Choice 3. Purposeful Behavior 4. Marginal Analysis |
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Economics Employs |
The scientific method and this form tests the hypotheses of cause and effect and the relationships to generate theories, laws and principles into an economic model |
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Optimal Point of Production Possibilities Curve |
Points within the curve: fully attainable Points outside the curse: unattainable (Measured until MB=MC) |
