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Flashcards in Introduction to Economics Deck (26)
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1
Q

oikonomos

A

“the one who manages the household”

2
Q

Economy

A

comes from the Greek word oikonomos

3
Q

True or False:

A household faces only one decision

A

False. A household faces many decisions

4
Q

Scarcity

A

society has limited resources and therefore cannot produce goods services people have

5
Q

True or False:

An individual can attain the highest standard of living

A

False because resources are limited.

6
Q

Study of how society manages its scarce resources

A

Economics

7
Q

They study how people make decisions

A

Economists

8
Q

Decisions are made by ____ and ______

A

Household and firms

9
Q

It is the level wherein decisions are made by firms and household

A

Microeconomics

10
Q

It is the level that examines the economy as a whole.

A

Macroeconomics

11
Q

Determine whether microeconomics or macroeconomics.

Change of income can change the demand of the product

A

Microeconomics

12
Q

Determine whether microeconomics or macroeconomics.

Question of unemployment

A

Macroeconomics

13
Q

Determine whether microeconomics or macroeconomics.

State activity that increases the economics growth

A

Macroeconomics

14
Q

The concept that we have limited resources and cannot meet unlimited demand

A

Scarcity

15
Q

Why do we use the term scarcity instead of limited when we talk about resources?

A

The concept of scarcity is not limited only to the quantity (or availability of a product or service) but also the quality. Example: Before the Industrial Revolution, there was no scarcity of clean air.

16
Q

True or False

Society can produce everything people wish to have

A

False.

17
Q

True or False

Without microeconomics, we can understand macroeconomics

A

False. Although we differentiate the two levels, there is a strong relationship between the two levels. In other words, without microeconomics, we can’t understand macroeconomics.

18
Q

In this model, the economy is simplified to include the two types of decision makers, the firms and household.

A

Circular Flow Diagram

19
Q

Give three examples of inputs that a firm produces

A

labor, land and capital (buildings and machines)

20
Q

They own the factors of production and consume the goods and services that firms produces

A

Household

21
Q

They produce the goods and services using inputs such as labor, land and capital

A

Firms

22
Q

The two types of market that firms and household interact on

A

market for goods and services and market for the factors of production

23
Q

In market for goods and services, household are ____ and _____ are sellers

A

buyers, firms

24
Q

In market for factors of production, household are ______ and _____ are buyers

A

sellers, firms

25
Q

They hire and use factors of production

A

Firms

26
Q

What’s missing in the circular flow diagram model?

A

Government