front 1 Economics is | back 1 the study of how humans make decisions in the face of scarcity. |
front 2 Scarcity means | back 2 that human wants for goods, services and resources exceed what is available. |
front 3 Division of labor | back 3 the way in which different workers divide required tasks to produce a good or service |
front 4 If you divide and subdivide tasks while producing a good or service it ... | back 4 produces a greater quantity of output |
front 5 Specialization | back 5 when workers or firms focus on particular tasks for which they are well suited within the overall production process |
front 6 As production increases, the average cost of producing | back 6 units decline |
front 7 Microeconomics | back 7 focuses on actions or individual's agents within the economy like households, workers, businesses |
front 8 Macroeconomics | back 8 is the branch of economics that focuses on broad issues such as growth, unemployment, inflation, and trade balance |
front 9 Monetary policy | back 9 policy that involves altering the level of interest rates, the availability of credit in the economy and the extent of borrowing |
front 10 Monetary policy is determined by | back 10 Nations Central Bank |
front 11 Fiscal policy | back 11 economic policies that involve government spending and taxes |
front 12 Fiscal policy is determined by | back 12 Nations Legislative Body |
front 13 A theory is a | back 13 simplified representation of how two or more variables interact with each other |
front 14 In a circular flow diagram, firms provide _____ and households provide _____ | back 14 wages, salaries |
front 15 Traditional Economy | back 15 typically an agricultural economy where things are done the same as they have always been done |
front 16 Command Economy | back 16 an economy where economic decisions are passed down from government authority and where the government owns the resources |
front 17 Market Economy | back 17 an economy where economic decisions are decentralized private, private individuals own resources, and businesses supply goods and services based on demand |
front 18 Market | back 18 interaction between potential buyers and sellers, combo of supply and demand |
front 19 Private enterprise | back 19 system where private individuals own and operate production |
front 20 Most economies in the world are | back 20 Mixed! |
front 21 Absolute free market does not exist | back 21 True |
front 22 Underground economies | back 22 heavily regulated economies create black markets |
front 23 Globalization | back 23 trend in which buying and selling in markets cross national borders |
front 24 Exports | back 24 goods and services that a nation produces at home and sells abroad |
front 25 Imports | back 25 goods and services that are produced abroad and then sold at home |
front 26 GDP | back 26 measures the size of total production in an economy |
front 27 Budget Constraint | back 27 all consumption combinations of goods that someone can afford, given the prices and all income is spent |
front 28 Opportunity set | back 28 all possible combinations of consumption that someone can afford given the prices of goods and the individuals income |
front 29 Opportunity cost | back 29 indicates what one must give up to obtain what he or she desires |
front 30 Marginal analysis | back 30 examining the benefits and costs of choosing a little more or a little less of a good |
front 31 Utility | back 31 satisfaction usefulness, or value one obtains from consuming goods and services |
front 32 Law of diminishing marginal utility | back 32 first slice of pizza eaten brings more satisfaction than the sixth |
front 33 Sunk Costs | back 33 costs that were incurred in the past and cannot be recovered |
front 34 Production possibilities frontier (PPF) | back 34 Efficient combination of two products that an economy can produce |
front 35 Law of deminishing returns | back 35 the increments of resources to producing a good or service are added, the benfit of them will decline |
front 36 Productive efficieny | back 36 when it is impossible to prduce more of one good withou decreasing another good |
front 37 Allocative efficiency | back 37 when the mix of goods produced represents the mix that society most desires |
front 38 Comparative advantage | back 38 when a country can produce a good at a lower opportunity cost than another country |
front 39 Invisible Hand | back 39 concept that individuals self interested behavior can lead to positive social outcomes |
front 40 Demand | back 40 the amount of a good or servie consumers are willing and able to purchase |
front 41 Price | back 41 what a buyer pays for a unit of the specific good or service |
front 42 Quantity demanded | back 42 the total number of units of a good or service consumers are willing to purchase at a given price |
front 43 Law of demand (Part 1) | back 43 If price goes up, then demand goes down |
front 44 Law of demand (Part 2) | back 44 If price goes down, demand goes up |
front 45 Demand schedule | back 45 tabl that shows range of prices for a certain good or service for quantity demanded at each price |
front 46 Demand curve | back 46 a graph between price and quantity demanded |
front 47 Quantity is on the what axis? | back 47 X |
front 48 Price is on the what axis? | back 48 Y |
front 49 Supply | back 49 amount of some good or service a producer is willing to supply at each price |
front 50 Quantity supplied | back 50 total number of units of a good or service producers are willing to sell at a given price |
front 51 Law of supply (Part 1) | back 51 if price goes up, then quantity supplied goes up |
front 52 Law of supply (Part 2) | back 52 If price goes down, then quantity supplied goes down |
front 53 Equilibrium | back 53 when quantity demanded = quantity supplied |
front 54 Equilibrium price | back 54 price where quantity demanded is equal to quantity supplied |
front 55 Equilibrium quantity | back 55 quantity at which quantity demanded and quantity supplied are equal for a certain price level |
front 56 Surplus (excess supply) | back 56 quantity supplied exceeds quantity demanded |
front 57 Shortage (excess demand) | back 57 quantity demanded exceeds quantity supplied |
front 58 Ceteris Paribus | back 58 "other things being equal" |
front 59 Income | back 59 Affects Demand |
front 60 Changing tastes or preferences | back 60 Affects Demand |
front 61 Changes in the composition of the population | back 61 Affects Demand |
front 62 Price of substitute or complement changes | back 62 Affects Demand |
front 63 Changes in expectations about future | back 63 Affects Demand |
front 64 Normal Good | back 64 product whose demand rises when income rises |
front 65 Inferior good | back 65 a product whose demand falls when income rises, rises |
front 66 Substitute | back 66 a good or service that we can use in place of another good or service |
front 67 Complements | back 67 goods or services used together |
front 68 Inputs/Factors of production | back 68 the combination of labor, materials, and machinery to produce goods |
front 69 Natural Conditions | back 69 Affect Supplies |
front 70 Input Prices | back 70 Affect Supplies |
front 71 Technology | back 71 Affect Supplies |
front 72 Government Policies | back 72 Affect Supplies |
front 73 Price controls | back 73 laws that government enact to regulate prices |
front 74 Price ceiling keeps price | back 74 rising above a certain level, legal max price |
front 75 Price floor keeps price | back 75 from falling below a given level, lowest price |
front 76 Deadweight loss | back 76 loss in social surplus when market produces inefficient quantity |