Economics Test 1 Flashcards
Terms : Hide Images [1]
| 946559477 | Adam Smith | Scottish philosopher Founder of modern economics Wealth of Nations Promoted self interest | |
| 946559478 | The Invisible Hand | Greed drives producers and consumers to help one another Competition leads to more efficient production/lower prices | |
| 946559479 | Economic Enigmas | Puzzles or models that might be explained through economic analysis | |
| 946559480 | Positive Economics | How things are right now | |
| 946559481 | Normative Economics | How thing ought to be | |
| 946559482 | Seven Principles of Economics | 1. Scarcity forces tradeoffs 2. Cost Versus Benefits (people choose when benefits of something are greater than cost) 3. Thinking at the Margin (most of the choices we make each day involve a little more or a little less of something) 4. Incentives Matter 5. Trades makes people better off 6. Markets coordinate trade 7. Future consequences count | |
| 946559483 | Tools of economics do what? | Allow then to analyzie how "efficient" the economy is | |
| 946559484 | Scientific method | -Ask Q -Develop Hypothesis -Conduct study/collect data -Analyze data -Evaluate hypothesis | |
| 946559485 | Graphs | Simplify the complex | |
| 946559486 | Factors of Production | The imput/output of the production process | |
| 946559487 | Land | The gifts of nature that produce goods and recources | |
| 946559488 | Perpetual Resources | Widley available and no risk of being used up (sunlight, waves) | |
| 946559489 | Renewable Resources | Can be replaced as they are used (fresh water, fish...) | |
| 946559490 | Non-Renewable Resources | Once they're used, they're gone forever | |
| 946559491 | Human capital | The time and effort people devote to producing goods/services | |
| 946559492 | Financial Capital | Money used in stocks, bonds, real estate, or business to produce future wealth | |
| 946559493 | Tools, machines and buildings capital | used on production of goods/services | |
| 946559494 | Shortage | Less of a good or service at a specific price (temporary) | |
| 946559495 | Scarcity | What people want no matter what the price (forever) | |
| 946559496 | Entrepeneurs | People willing to take the risks involved in starting a business | |
| 946559497 | Productivity | A measure of the output of the economy per unit imput | |
| 946559498 | Utility | The satisfaction or pleasure one gains from consuming a product/service | |
| 946559499 | Marginal utility | The extra satisfaction or pleasure you will get from an increase of one additional unit of a good or service | |
| 946559500 | Production Possibilities Frontier | An economic model in the form of a line graph that shows how an economy might use it's resources to produce two goods | |
| 946559501 | Why is it called a Frontier? | Because it represents the best that this economy can do with its current factors of production | |
| 946559502 | Changes in the PPF | Grows-shifted to the right Shrinks-shifted to the left |