Econ
Cards (18)
- EconomicsThe social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices
- Main parts of economics
- Microeconomics
- Macroeconomics
- MicroeconomicsThe study of choices that individuals and businesses make, the way those choices interact in markets, and the influence of governments
- MacroeconomicsThe study of the performance of the national and global economies
- Two big questions in economics
- How do choices end up determining what, how, and for whom goods and services get produced?
- When do choices made in the pursuit of self-interest also promote the social interest?
- Goods and servicesThe objects that people value and produce to satisfy human wants
- Agriculture accounts for less than 1 percent of total U.S. production, manufactured goods for 20 percent, and services for 80 percent
- In China, agriculture accounts for 10 percent of total production, manufactured goods for 50 percent, and services for 40 percent
- Factors of production
- Land
- Labor
- Capital
- Entrepreneurship
- LandThe "gifts of nature" that we use to produce goods and services
- LaborThe work time and work effort that people devote to producing goods and services
- Human capitalThe knowledge and skill that people obtain from education, on-the-job training, and work experience
- CapitalThe tools, instruments, machines, buildings, and other constructions that businesses use to produce goods and services
- EntrepreneurshipThe human resource that organizes land, labor, and capital
- Land earns rent, labor earns wages, capital earns interest, and entrepreneurship earns profit
- An outcome is in the social interest if it uses resources efficiently and distributes goods and services fairly
- TradeoffAn exchange, giving up one thing to get something else
- Opportunity costThe highest-valued alternative that we give up to get something