Econ 111 Exam 1

Front 1

a social science dealing with the allocation of scarce resources to meet unlimited wants

Back 1

Economics

Front 2

Land, Labor, Capital, and Entrepreneurial Ability

Back 2

Scarce Resources in the Factor of Productions

Front 3

all natural resources

Back 3

Land

Front 4

Human effort in the production process; none owners

Back 4

Labor

Front 5

refers to the tools, equipment, machinery used the production process

Back 5

Capital

Front 6

owner and owners in the business; they take risks and organizes the factors of production

Back 6

Entrepreneurial Ability

Front 7

The idea of scarce resources and the unlimited desires of wants

Back 7

The economic problem

Front 8

This is the most important thing you give up when making a choice; next best alternative; second choice

Back 8

Opportunity Cost

Front 9

a simplification of reality

Back 9

Economic Model

Front 10

a Latin phrase used to simplify life; and means "everything else remains constant'

Back 10

Ceteris Paribus

Front 11

1. Two-Good Economy

2. All resources are efficiently utilized

3. Technology and resources are fixed

Back 11

The three assumptions of the production possibilities model

Front 12

1.What goods and services will be produced?

2.How will the goods and services be produced?

3.Who will get the goods and services?

Back 12

The three fundamental questions Econ systems must answer

Front 13

When you buy something, you are casting a dollar vote for that item

Back 13

Dollar Votes

Front 14

the idea that the consumers are in charge

Back 14

Consumers sovereignty

Front 15

a mechanism or place that brings together buyers and sellers

Back 15

Market

Front 16

Allocates scarce resources through the interaction of buyers and sellers

Back 16

Market System

Front 17

1. Systems of free markets and prices

2. Role of private property and property rights

3. Limited role of government

4. Role of self-interest as a motivating factor

5. Competition

Back 17

Key elements of a Market Economy

Front 18

Contains two participants;

Has a resource and product market;

Also has a money flow and real flow

Back 18

Circular Flow Model

Front 19

Provided to businesses from households

(Land, Labor, Capital, and Entrepreneurial Ability)

Back 19

Resources/Factors of Production

Front 20

each factor receives a factor payment to lure resources from alternative uses

(Rent, Wages, Interest, and Normal Profit)

Back 20

Factor Payments

Front 21

the minimum amount it takes to keep the entrepreneur in business for his/herself; this is also the cost of production

Back 21

Normal Profit

Front 22

this is the Total Revenue minus Total Costs

Back 22

Pure Economic Profit

Front 23

Price x Quantity

Back 23

Total Revenue

Front 24

all the costs of production including normal profit

Back 24

Total Costs

Front 25

The Factor Payments and Consumers Expenditures

Back 25

Money Flow

Front 26

Factors of Production and Goods and Services

Back 26

Real Flow

Front 27

Factors of Production and Factor Payments

(H.C are the suppliers and Businesses are the demanders)

Back 27

Resource Market

Front 28

Consumers Expenditures and Goods and Services

(Businesses are the suppliers and H.C are the demanders)

Back 28

Product Market

Front 29

is the study of economics by looking at the entire economy

Back 29

Macroeconomics

Front 30

uses economics to study and look at the individual units-one price, firm, or industry output

Back 30

Microeconomics

Front 31

makes the decision about what and how to produce as well as who gets the stuff through interaction of buyers and sellers

Back 31

Market Economy

Front 32

the schedule that shows that quantities of a good consumers are willing and able to buy at various prices out of a set of all possible prices, over a specified period of time.

Back 32

Demand Schedule

Front 33

there will always be an inverse(indirect) or negative relationship between price and quantity demanded

Back 33

Law of Demand

Front 34

What happens to QD as price goes down?

Back 34

QD increases

Front 35

What happens to QD as price goes up?

Back 35

QD decreases

Front 36

this reflects a movement along a demand curve as the price changes (ceteris paribus)

Back 36

Change in Quantity Demanded

Front 37

a right or left shift in demand moving the entire curve

(more or less is demanded at all possible prices)

Back 37

A Change in Demand