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57 Cards in this Set
- Front
- Back
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Where did the word economics come from?
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Greek word oikonomia meaning household management
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economics
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economics is the social science that deals with the fair allocation of scarce resources among alternative uses in order to satisfy unlimited needs and wants.
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why do we study economics?
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to manage personal and national resources
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Who is the father of modern economics?
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Adam Smith England 1776
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Why is Adam Smith the father of modern economics?
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He made an inquiry into the nature and causes of the wealth and nations wealth
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two divisions of economics
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Microeconomics and Macroeconomics
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microeconomics
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Deal with the economy of individual units households industries and firms.
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Macroeconomics
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Deals with the economy of the nation as a whole.
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four economic goals
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Equality Equity Efficiency and Full Employment.
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What is the difference between equality and equity?
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Equality is to give everyone the same amount of a certain substance while equity is to give what is due.
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Why is economics a science?
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no srsly idk
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shortage
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a condition wherein current supply does not meet current demand.
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scarcity
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a condition wherein resources are limited and have alternative uses while needs and wants are unlimited.
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What is the difference between shortage and scarcity?
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shortage is recoverable while scarcity is permanent and natural resources are often involved.
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choice
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Is the power to select or decide
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trade-off
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Having less of one thing in order to get more of something.
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opportunity cost
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real economic cost of goods service or resources. choosing the best alternative to get something better.
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How are the terms choice trade-off and opportunity cost related?
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they are all exercised in the act of prioritizing.
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efficiency
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indicates a balance between benefit and loss has been achieved.
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economizing
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economizing is the process in which we use our money and resources efficiently to avoid scarcity.
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Abraham Maslow's hierarchy of needs
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1. physiological
2. safety 3. love and belongingness 4. esteem 5. self-actualization |
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according to Sigmund Freud what is our psyche Apparatus?
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Ego executive
ID animal nature SUPER EGO moral department |
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what is the difference between needs and wants?
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needs are the basic requirements for our survival
,wants are not of real importance and is a means of expressing a need |
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How does scarcity affect satisfaction of human needs and wants?
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giving the impression of scarcity or limitednes raises the demand or price for it
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Alderfers existence relatedness growth theory
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1. existence
2. relatedness 3. growth |
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how is Abraham Maslow's pyramid difference from Alderfers?
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in all Alderfer's pyramid there is regression
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three basic economic questions
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what to produce? CONSUMPTION
how to produce? PRODUCTION for whom to produce? DISTRIBUTION |
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consumption
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using goods and services to satisfy our needs and wants
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utility
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level of satisfaction in utils
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three types of consumption
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1. direct consumption- immediate satisfaction
2. productive consumption- goods are purchased to produce other goods 3. wasteful consumption- goods do not produce any satisfaction |
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marginal utility
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additional satisfaction that a consumer gets from consuming one more unit of the same good.
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The graphs of total utility and marginal utility are _______ ________
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inversely proportional
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Law of diminishing marginal utility
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'As the individual's consumption of a commodity increases, the marginal utility of each additional unit decreases, therefore the marginal utility increases at a diminishing rate."
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How does the law of decreasing marginal utility affect producers and consumers?
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innovation, The should be improvements to the product or else if will fade like a fad
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How can we be more responsible consumers knowing the law of diminishing marginal utility?
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by not buying into fads and buying classics
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How can we make wise choices?
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****
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Scientific Method
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1. observation 2. formulation of theory 3. collection, verification and arrangement, analysis, synthesis, and interpretation of data
4. Testing of theory 5. formulation of conclusion 6. Generalization and finalization of conclusion |
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Fact |
Data relevant to a study |
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Principle |
generalization about an economic behavior |
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Theory |
a principle that can easily be disproved |
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Law |
principle thats lasts for a long time |
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Policy |
actions made by the government |
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Consumer rights |
safety a clean environment compensation against damage be heard be influenced choose consumer education |
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consumer responsibilities |
to be vigilant to take action to be concerned about the community to be concerned about the environment to foster unity |
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Factors affecting Consumer behavior |
Media Economic Social Cultural |
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PPF |
Production Possibilities Frontier |
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Factors of Production |
Capital Labor Land Entrepreneurs |
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Forms of Income |
Interest salary/wage rent profit |
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How does Capital Accumulate? (basta capital accumulation) |
savings->loans->capital |
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Circular flow of Goods and Services |
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Formula of Down Payment or discount |
DP/D=CP*DP% Down Payment = Cash Price*Down Payment rate |
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Formula of Amount FInanced |
AF=CP-DP Amount Financed = Cash Price-Down Payment |
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Formula of Interest |
INT=AF*INT% Interest = Amount Financed*Interest Rate |
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Formula of Amount Payable |
AP=AF+AR Amount Payable = Amount Financed+Interest |
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Formula of Monthly Installment |
MI=AP/TIME OR TERM Monthly Installment = Amount Payable/Timer or Term |
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What are the disadvantages to Monthly Installment? |
Monthly Installment is more expensive the the Cash Price Indebtedness Monthly Installment could last longer than the life of the item/product |
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What are the advantages of Monthly Installment? |
If you don't have enough money right now you can pay it back over time |
