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1
Q

What is economics?

A

The study of how people use limited resources to meet unlimited wants.
“There’s no such thing as a free lunch”

2
Q

Occurs when there are limited quantites of resources to meet unlimited needs or desire. (always exists)

A

Scarcity

3
Q

Occurs when producers will not or cannot offer goods or services at current prices. (temporary)

A

Shortages

4
Q

Factors of production also means…

A

resources

5
Q

All natural resources that are used to produce goods and services.

A

Land

6
Q

Any effort a person devotes to a task for which that person is paid. Wages and salaries are paid.

A

Labor

7
Q

Any human made resource that is used to create other goods and services.

A

Capital

8
Q

What is physical capital?

A

Used to creat machines and tools

9
Q

What is human capital?

A

Education and knowledge

10
Q

What is an entrepenuer?

A

A person who brings together the land, labor, and capital and starts a business. Can be considered a 4th factor of production.

11
Q

The alternitive that we give up whenever we chooses one curse of action ver others.

A

Trade-off

12
Q

Most desirable alternitive given up as a result of a decision

A

oppertunity cost

13
Q

When you decide how much more or less to do.

A

thinking in the margin

14
Q

What is a production possibility

A

A graph that shows alternitive ways that an economy can use its resources

15
Q

How is efficiency represented on the graph?

A

any point on the line

16
Q

What is the Law of Increasing Oppertunity Cost?

A

The amount of other products that must be forgone (forgotten) to obtain more of any given product

17
Q

resources are not being used to their fullest capability

A

underutilization

18
Q

Alternitives given up when a decision is made

A

trade-off

19
Q

The highest valued trade-off is called…

A

oppertunity cost

20
Q

A decison when you add one unit or subtracting one unit.

A

Thinking at the margin

21
Q

This shows the alternitive ways in which an economies resources can e used.

A

production possibility curve

22
Q

Pionts insode the production possibilities curve reflects a _________ of resources.

A

underutilization

23
Q

Any line inside the production possibility curve represents…

A

efficiancy

24
Q

PIonts outside of the production possibility line represent….

A

growth.

25
Q

To gain economic groth we either need to gain more resources or more _______

A

technology

26
Q

We must give up up resources in order to produce another product because the resources are _______

A

limited

27
Q

If there is a shortage of a produc there is to much ______ and not enough supply of the product.

A

demand

28
Q

What are the 5 economic goals?

A

Freedom, efficiency, security, growth, and equity

29
Q

What is the goal for economic freedom?

A

Economic freedom means that people are free from government intervention and the production and distribution of goods and services.

30
Q

What is the goal of economic efficiency?

A

This means that the products that people demand are being produced at a low cost. This also means supply equals demand.

31
Q

What does the goal of economic security mean?

A

Provides safety nets in the economy like unemployment insurance or disaster relief programs.

32
Q

What is the goal of economic growth mean?

A

This means that the standard of living is increasing because the economy has more goods and services available. This goal is achieved by new technology or new resources.

33
Q

What is the goal of economic equity?

A

It means that there is a fair distribution of wealth.

34
Q

What does the circular flow diagram show?

A

This diagram illustrates efficency because it shows how the markets are self-regulating without government help.

35
Q

What theory says that people look for their own self interest?

A

The Invisible Hand Theory

36
Q

What is the regulating force that keeps prices low?

A

Competition

37
Q

Why don’t centrally planned economies work well?

A

Lack of motivation

38
Q

why can’t centrally planned economy’s meet people’s needs and wants?

A

because the government owns or controls the factors of production and controls the output

39
Q

which country has the most economic freedom?

A

Hong Kong

40
Q

what does Hong Kong lack?

A

safety net programs because there is freedom

41
Q

what are the three advantages of the free market system?

A

economic growth, economic freedom, and economic efficiency

42
Q

what are the disadvantages of a free market system?

A

Equity and security

43
Q

why is the US economy a mix system?

A

because it has a large amount of economic freedoms but the government does intervene to help make the company more efficient

44
Q

what happens when the supply and demand are equal and then economy?

A

The economy is efficient

45
Q

what what makes companies lose motivation to be efficient with the use of resources?

A

government controlling economy