Help
Options
Question
The social science concerned with how individuals, institutions and society make best choices under scarcity
click to flip
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't know
Question
exceeds society's productive capacity
Remaining cards (59)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Economics 1
| Question | Answer |
|---|---|
| The social science concerned with how individuals, institutions and society make best choices under scarcity | Economics |
| exceeds society's productive capacity | Economic wants |
| A viewpoint that envisions individu-als and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions | Economic perspective |
| listed under economic perspective | Scarcity and choices, purposeful behavior, marginal analysis |
| resources are scarce(economic perspective) | Scarcity |
| what are the steps to the scientific method | observe real life behavior, formulate a hypothesis, test hypothesis, accept, reject or modify the hypothesis, continue to test hypothesis, |
| the part of economics concerned with decision making by individual units such as household, a firm, or an industry and individual markets, specific goods and services, and product and resource prices | microeconomics |
| the part of economics concerned with the performance and behavior of the economy as a whole. Focuses on economic growth, the business cycle, interest rates, inflation, and the behavior of major economic aggregates such as household business and sectors | macroeconomics |
| economics that focuses on facts and cause and effect relationships | positive economics |
| economics that includes description, theory development and theory testing | positive economics |
| economics that avoid value judgement It tries to establish scientific statements about eco-nomic behavior and deals with what the economy is actually like. Such scientific-based analysis is critical to good policy analysis. | positive economics |
| which incorporates value judgments about what the economy should be like or what particular policy actions should be recommended to achieve a desir-able goal. looks at the desirability of certain aspects of the economy. | normative economics |
| It underlies expressions of support for particular economic policies. | normative economics |
| Positive economics concerns what is, whereas norma-tive economics embodies subjective feelings about what ought to be . Examples: Positive statement: “The unemploy-ment rate in France is higher than that in the United States.” Normative statement: | positive and normative economics |
| “France ought to undertake policies to make its labor market more flexible to reduce unemployment rates.” Whenever words such as “ought” or “should” appear in a sentence, you are very likely encoun-tering a normative statement. | positive and normative economics |
| the need to make choices because economic wants exceed economic means—will enhance your understanding of economic models and the difference between micro-economic and macroeconomic analysis. | economizing problem |
| listed under the economizing problem | limited income, unlimited wants, budget line, attainable and unattainable combinations, trade offs and opportunity cost |
| his money! And the majority of us have much more lim-ited means. Our income comes to us in the form of wages, interest, rent, and profit, although we may also receive money from government programs or family members (economizing problem) | limited income |
| A line that shows the different combinations of two products a consumer can produce with a specific money income, given the products' prices | budget line |
| listed under society's economic problem | land, labor, capital and entrepreneurial ability |
| includes all natural resources (“gifts of nature”) used in the production process. These include forests, mineral and oil deposits, water resources, wind power, sunlight, and arable land. | land |
| consists of the physical ac-tions and mental activities that people contribute to the production of goods and services. | labor |
| includes all goods and services. Included are all factory, storage, trans-portation, and distribution facilities, as well as tools and machinery. | capital |
| the human resource that combines the other economic resources of land, labor, and capital to produce new products or make innovations in the production of existing products | entrepreneurial ability |
| takes the initiative in combining the resources of land, labor, and capital to produce a good or a service. | entrepreneur |
| makes the strategic business decisions that set the course of an enterprise. | entrepreneur |
| innovates, He or she commercializes new products, new production techniques, or even new forms of business organization. | entrepreneur |
| takes risks | entrepreneur |
| individuals who provide entrepreneurial ability to firms by setting strategy, advancing innovations, and bearing the financial risk if their firms do poorly. | entrepreneurs |
| lists the different combina-tions of two products that can be produced with a specific set of resources, assuming full employment. | productive possibility model |
| As more of a particular good is produced, its marginal opportunity costs increase | law of increasing opportunity cost |
| The limits placed on the amounts and types of goods and services available for consumption as the result of there being only limited economic resources from which to produce output; | scarcity |
| the fundamental economic constraint that creates opportunity costs and that necessitates the use of marginal analysis ( cost-benefit analysis ) to make optimal choices. | scarcity |
| restricts options and demands choices. Because we “can’t have it all,” we must decide what we will have and what we must forgo. | scarcity |
| that “there is no free lunch.” You may be treated to lunch, making it “free” from your perspective, but someone bears a cost. Because all resources are either privately or collectively owned by members of society, ultimately society bears the cost., | scarcity |
| The amount of other products that must be forgone or sacrificed to produce a unit of a product. | opportunity cost under scarcity |
| the pleasure, happiness, or satisfac-tion obtained from consuming a good or service | utility (purposeful behavior) |
| rational self-interest | purposeful behavior |
| individuals and utility | purposeful behavior |
| firms and profit, business decides what products to produce and how to produce them, government deals with finance | purposeful behavior |
| desire outcome | purposeful behavior |
| comparisons of marginal benefits and marginal costs, usually for decision making | marginal analysis |
| benefit is the perceived lifetime pleasure (utility) from the larger-size stone. If the marginal benefit of the larger diamond exceeds its marginal cost (and you can afford it), buy the larger stone. | marginal benefit |
| But if the marginal cost is more than the marginal benefit, you should buy the smaller diamond instead—even if you can afford the larger stone! | marginal benefit |
| marginal means what | extra |
| Economic principles are generalizations relating to economic behavior orto the economy itself. Economic principles are expressed as the tendencies of typical or average consumers, workers, or business firms. | generalizations |
| listed under economic principle | generalization, other things equal assumption, graphical expression |
| the assumption that factors other than those being considered do not change. They assume that all vari-ables except those under immediate con-sideration are held constant for a parti-cular analysis. | other-things-equal-assumption |
| the determining variable is called | independent variable=x |
| the variable is determined is called | dependent variable=y |
| infinity slope is | |
| economic resources are the natural human and manufactured to produce goods and services | |
| Because economic resources are used to produce goods and services, they are called | factors of production or inputs |
| Money is not considered a capital resource because money is | not productive |
| Why is entrepreneurial ability distinct from labor even though both are considered as a category of economic resource? | Because entreprenuerial ability is not directly engaged in production. |
| The marginal benefit curve is | downward |
| the marginal cost curve is | upward |
| With these curves, the optimal allocation of resources to a particular product will occur when | MB=MC |
| current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product? | fewer |
| In a command economy scarce goods are allocated by |
Created by:
Phole101