Econ

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DecentTuna61598

Cards (18)

Economics 
The 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
Microeconomics 
The study of choices that individuals and businesses make, the way those choices interact in markets, and the influence of governments
Macroeconomics
The 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 services
The 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
Land
The "gifts of nature" that we use to produce goods and services
Labor 
The work time and work effort that people devote to producing goods and services
Human capital 
The knowledge and skill that people obtain from education, on-the-job training, and work experience
Capital 
The tools, instruments, machines, buildings, and other constructions that businesses use to produce goods and services
Entrepreneurship 
The 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
Tradeoff 
An exchange, giving up one thing to get something else
Opportunity cost 
The highest-valued alternative that we give up to get something