Chapter 1 - Intro Flashcards Preview

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Flashcards in Chapter 1 - Intro Deck (33)
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1
Q

Economics

A

The study of how humans utilize resources

2
Q

Scarcity

A

The desire for goods and services outweighs resources available

3
Q

Adam Smith

A

Innovation of division and specialization of labour

4
Q

Division of labour

A

Dividing tasks among workers instead of everyone doing everything

5
Q

Specialization of labour

A

Focus on one part of production at which you have an advantage

6
Q

Advantages of specialization of labour (3)

A
  1. People can do what they are good at/they can do what is most profitable
  2. When given one task, people learn to it very well and produce higher quality items efficiently
  3. Cost of producing decreases as level of production increases
7
Q

Economies of scale

A

Price decreases, level of production increases, cost of producing decreases

8
Q

Does specialization require trade?

A

Yes. If you only do one task, how can you do anything else like build a house, make food, etc. You must trade your task and money earned for things you do not have.

9
Q

Why study economics?

A

Learning about economics helps you understand the major problems facing the world today, prepares you to be a good citizen, and helps you become a well-rounded thinker

10
Q

Microeconomics

A

Actions of individual aspects, such as companies and workers

11
Q

Macroeconomics

A

Big picture aspects, such as inflation and unemployment

12
Q

Monetary policy

A

Bank lending, interest rates, etc. conducted by a central bank

13
Q

Fiscal policy

A

Government spending dictated by a legislative body

14
Q

John Maynard Keynes’ famous introduction

A

Economics is a method rather than a doctrine

15
Q

John Maynard Keynes

A

Involved in helping the country in the Great Depression by innovating things such as unemployment insurance

16
Q

Circular flow diagram

A

Households -> labour, payments for goods and services -> Firms -> salaries, goods and services -> Households

17
Q

Goods and services market

A

Firms sell, households buy

18
Q

Labour market

A

Firms buy, households sell

19
Q

Traditional market

A

Patriarchal, on the land, occupation stays in the family. Involves very little economic progress (South America)

20
Q

Free market

A

Private enterprises and companies control the market

21
Q

Command market

A

Government control over the market (communism) (North Korea)

22
Q

Market

A

Brings together buyers and sellers

23
Q

Mixed economy

A

Combination of a free market and a command market (USA, Canada)

24
Q

Underground economy

A

Where buyers and sellers have transactions without government approval

25
Q

Globalization

A

Importance of international trade

26
Q

Exports

A

Goods sent out to other countries

27
Q

Imports

A

Goods brought in from other countries

28
Q

5 factors of production

A

Land, labour, capital, entrepreneurs, information

29
Q

Opportunity cost

A

By saying yes to one thing, you are forgoing another opportunity in the future. The value of one is forgone when the other is chosen.

30
Q

2 causes of globalization

A

Reduced costs of transportation and revolution in technology

31
Q

Capitalism

A

Free market, privately owned

32
Q

Socialism

A

More things are owned by the government, some privately owned companies

33
Q

Communism

A

No private property, government controlled