Intro to Economics

Cards (18)

  • Social Science: the study of society and how people collectively behave
    and influence the world around us
  • Economics: how to allocate scarce resources to satisfy
    man’s unlimited needs and wants
  • Macroeconomics: deals with the overall performance of national
    and international economies
  • Microeconomics: deals with the behavior of the individual units of the
    economic system (e.g consumer, producer,
    resources owners).
  • Scarcity: IS THE CONDITION OF RESOURCE INSUFFICIENCY TO SATISFY ALL THE NEEDS AND WANTS OF A POPULATION.
  • Shortage: can be replenished; artificial limitation brought about by the market situation
  • Opportunity Cost: the value of the best-foregone alternative
  • Trade-off: when you choose one thing which causes you to have to give up, or sacrifice, another
  • Net Benefit: determined by summing all benefits and subtracting the sum of all costs of a project
  • Net Loss: when total expenses exceed the income or revenue produced for a given period of time.
  • Factors of Production:
    • Land
    • Labor
    • Capital
    • Entrepreneurship
  • 3 Questions to be Answered:
    • What to produce?
    • How to produce?
    • For whom to produce?
  • Economic Systems:
    • Traditional Economy: decisions are based on traditions and practices upheld over the years and passed on from generation to generation.
  • Command Economy: a central government makes all economic decisions
  • Market Economy: producers and consumers decide what, how, and forwhom to produce collectively guided by the price system
  • Mixed Economy: combination of the three basic types of economic systems. government is involved in planning the use of some resources and can exert control over businesses in the private sector
  • Gross National Income: the market value of final products produced by the resources of the economy in a given period
  • Gross Domestic Product: is the market value of final products produced by domestic resources