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25 Cards in this Set
- Front
- Back
Good
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anything from which individuals receive utility or satisfaction.
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Utility
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the satisfaction one receives from a good.
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Bad
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anything from individuals receive disutility or dissatisfaction.
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Disutility
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the dissatisfaction one receives from a bad.
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Resources
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1. Land
2. Labor 3. Capital 4. Entrepreneurship |
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Resources:
1. Land |
all natural resources, such as minerals, forests, water and unimproved land.
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Resources:
2. Labor |
the physical and mental talents people contribute to the production process.
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Resources:
3. Capital |
Produced goods that can be used for further production such as factories machinery, tools, computers and buildings.
Money is not capital! |
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Resources:
4. Entrepreneurship |
the particular talent some people have for organizing the resources of land, labor and capital to produce goods, seek new business opportunities and develop new ways of doing things.
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Scarcity
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the condition in which our wants are greater than the limited resources available to satisfy those wants.
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Economics
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the science of scarcity; the science of how individuals and societies deal with the fact that wants are greater than the limited resources available to satisfy those wants.
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Scarcity's Effects
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1. the need to make choices
2. the need for a rationing device 3. competition |
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Scarcity's Effects
1. the need to make choices |
in a world of limited resources, we must choose which wants will be satisfied and which will go unsatisfied.
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Scarcity's Effects
2. the need for a rationing device |
a rationing device is a means of deciding who gets that quantities of the available resources and goods.
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Scarcity's Effects
3. competition |
because there are unlimited wants, there is competition for the limited resources.
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Opportunity Cost
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the most highly valued opportunity of alternative forfeited when a choice is made.
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Marginal Benefits
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additional benefits; the benefits connected to consuming an additional unit of a good or undertaking one more unit of an activity.
Graph: MB goes down as time goes on. |
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Marginal Costs
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additional costs; the costs connected to consuming an additional unit of a good or undertaking one more unit of an activity.
Graph: MC goes up as time goes on. |
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Decisions at the Margin
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decision making characterized by weighing the additional benefits of a change against the additional cost of a change with respect to current conditions.
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Efficiency
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exists when marginal benefits equal marginal costs.
Graph: MB = MC; where MB and MC intersect. |
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Exchange (Trade)
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the process of giving up one thing for another.
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Positive Economics
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the study of "what is" in economic matters.
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Normative Economics
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the study of "what should be" in economic matters.
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Microeconomics
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the branch of economics that deals with human behavior and choices as they relate to relatively small units, such as an individual, a firm, an industry, a single market.
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Macroeconomics
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the branch of economics that deals with human behavior and choices as they relate to highly aggregate markets (ex. the good and services market) or the entire economy.
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