Econ Unit 1
Terms
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- Define Economics
- Study of:-choices made to satisfy wants and needs, -process by which goods and services are produced, -govt plicies on economies and economic stability
- Define Scarcity
- Not being able to have all goods and services because there is not enough resources, all societies have scarcity
- Define Opportunity Cost
- The cost of the next best alternative use of money, time, or resources
- Define Tradeoffs
- Giving up something to get more of a different thing
- Explain the Idea of the Invisible Hand
- Companies and resource suppliers pursuing their self interest use most efficent process and further innovations. By doing that it promotes public interest (helps others)
- What is the importance of Adam Smith to Economics?
- Wrote the 'Wealth of Nations' in 1776 about the basc principles of economic and created the concept of the invisible hand.
- What does Ceteris Paribus mean?
- When measuring in economics one assumes that everything is staying the same except what is being measured.
- Explain the difference between positive and normaitive economics.
- Positive econ. is concerned with straight facts and Normative econ. is concerned with value and judgenments.
- What 3 questions must all economic systems answer?
- 1)What to produce 2)How to produce it 3)For whom to produce
- Define Per-Unit Opportunity Cost
- (Units of goods or services lost)/(Units of goods or services produced)
- What are the characteristics of a Market System Economy
- Laissez Faire, individual decisions with free choice and enterprise
- What are the characteristics of a Command Economy
- Centralized decisions, usually by govt. Property is owned by society.
- What are the characteristics of a Traditional Economy
- Production methods, exchange and income distribution are sanctioned by custom
- What market system is the USA?
- A combo of free market and command, ppl and comanies act in their best interest w/o govt intereference and ownership of private property
- What is the difference between Microeconomics and Macro Economics?
- Microeconomics is the study of ppl and businesses w/in a single market Macroeconomics is the study of the whole market
- Define Markets
- A location or mechanism that allows buyers and sellers to deal readily in a certian economic product.
- What does a Market consist of?
- consumers, firms, and households