Details Title: CHAP 1 ECON 2020 Description: Final Exam Flashcards Total Flash Cards: 43 Created: 05/04/2009 12:00:23		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Economics Flashcards
Cards in this set: Term Scarcity Definition Although our wants are UNLIMITED, the resources needed to obtain them are LIMITED. Term Economics Definition The study of the CHOICES that CONSUMERS, MANAGERS, AND GOVERNMENT OFFICIALS make to obtain their goals, GIVEN their SCARE RESOURCES. Term Market Definition A group of BUYERS and SELLERS of a GOOD or SERVICE and the INSTITUTION or ARRANGEMENT by which they come together to TRADE. Term Rational Definition People make decisions that they feel will be best for them. BENEFITS OUTWEIGH COST. Term Economic Incentives Definition Money is a powerful thing. If it costs less to get robbed than to prevent from getting robbed, a bank will just get robbed. Term Marginal Benefit Definition MB, The ADDITIONAL ENJOYMENT of ONE more unit. Term Marginal Cost Definition MC, The ADDITIONAL COST of ONE more unit. Term Marginal Analysis Definition A comparison of Marginal Benefit vs. Marginal Cost in an effort to make better economic choices. Term Additional (what should you think of) Definition Marginal. Term Trade-offs Definition Producing one more unit of one good or service means producing less of another good or service. Term Opportunity Cost Definition The highest-valued alternative that must be given up to engage in a given activity. Term Three Fundamental Questions (1.2) Definition What goods and services will be produced? How will the goods and services be produced? Who will receive the goods and services produced? Term The Two Main Types of Economic Structures Definition Centrally Planned Economy, Market Economy. Term Centrally Planned Economy Definition The government decides how economic resources will be allocated. Term Market Economy Definition The decisions of households and firms interacting in markets allocate economic resources. Term Mixed Economy Definition The U.S. is a good example. Most decisions are made from the interaction of buyers and sellers in markets, but the government plays a significant role in the allocation of resources. Term Productive Efficiency Definition The good or service is produced at the lowest possible cost. Term Allocative Efficiency Definition Production is in accordance with consumer preferences. Term Voluntary Exchange Definition Both the buyer and seller are made better off by the transaction. Term Equity Definition The fair distribution of economic benefits. Term Hypothesis Definition A statement about an economic variable. Term Economic Variable Definition Something measurable that can have different values, like the wages of software programmers. Term Positive Analysis Definition Analysis concerned with WHAT IS. Term Normative Analysis Definition Analysis concerned with WHAT OUGHT TO BE. Term Microeconomics Definition The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices. Term Macroeconomics Definition The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth. Term Technology Definition The processes a firm uses to produce goods and services. Term Firm Definition An organization that produces a good or service. Term Company Definition An organization that produces a good or service. Term Business Definition An organization that produces a good or service. Term Good Definition Tangible merchandise Term Service Definition An activity done for others. Term Revenue Definition The total amount received for selling a good or service. Term Profit Definition Total Revenue - Total Cost. Term Accounting Profit Definition Exclude the cost of some economic resources that the firm does not pay for explicitly. Term Economic Profit Definition Include the opportunity cost of all resources used by the firm. Term Household Definition All persons occupying a home, a supplier of labor used by firms to produce goods and services. Term Factors of Production Definition Labor, Capital, Human Capital, Natural Resources (including land), and entrepreneurial ability. Term Financial Capital Definition Stocks and bonds, bank accounts, and holdings of money. Term Physical Capital Definition Manufactured goods that are used to produce other goods and services. IE computers, factory buildings, machine tools, warehouses, trucks. Term Capital Stock Definition The total amount of physical capital available in a country. Term Human Capital Definition The accumulated training and skills that workers possess. Term Percent Change (formula) Definition ((V2-V1)/V1) x 100