Shared Flashcard Set

Details

Exam 1
Microeconomics
37
Economics
Undergraduate 2
02/16/2011

Additional Economics Flashcards

 


 

Cards

Term
economics
Definition
the study of the way people organize themselves to sustain life and enhance its quality
Term
The Four Essential Economic Activities 
Definition

1) resource maintenance 

2)production

3)distribution

4)consumption

of goods and services.

Term
Normative questions
Definition
questions about how things should be
Term
Positive questions
Definition
questions about how things are
Term
Negative Externalities 
Definition

negative effects on the environment or people other than those directly involved in the activity

 

ex: A manufacturing firm's dumping of pollutants in a river, decreasing water quality downstream.

Term
Positive Externalities 
Definition

beneficial side effects, or unintended consequences, of economic activity that accrue largely to persons or entities that are not among the economic actors directly involved.

 

ex: A person who plants a flower garden for their own pleasures, pleases someone passing by.

Term

Resource Maintenance

 

Definition

tending to, preserving, or improving resources.

 

ex: Forestry projects that raise timber for future use.

Term
Production
Definition

the conversion of some of these resources into usable goods or services.

 

ex: someone cooking a meal

Term
Distribution 
Definition

sharing of products and resources among people.

two forms: exchange and transfer

 

ex: handing over money to purchase a product (exchange)

 

ex: school boards distributing money to education services (transfer)

Term
Consumption
Definition

the process by which goods and services are finally put to final use by people.

 

ex: burning gasoline in a car

Term
Core Sphere
Definition
made up of household, family, and communities 
Term
Public Purpose Sphere 
Definition
governments and other local, national, and international organizations established for some public purpose beyond individual or family self-interest and not operation with the goal of making a profit
Term
Business Sphere 
Definition
firms that produce goods and services for profitable sale
Term
Production Possibility Frontier (PDF)
Definition
a curve showing the maximum amounts of two out-puts that society could produce from given resources, over a given period of time
Term
Opportunity Cost
Definition
the value of the best alternative that is foregone when a choice is made.
Term
Markets
Definition

social organizations set up to facilitate exchange

 

-labor markets

-financial markets

-farmer's markets

Term
Economic Organizations 
Definition
an entity that is made up of individual economic actors and sub-organizations, which may have common or conflicting interests
Term
Custom economic Organization
Definition

body of traditions, habits, and expectations about what it is proper and necessary for people to do in given circumstances.

 

- personal beliefs

-religion

 

*Pro* gives people a highly defined sense of their place in the natural and social world.

 

*Con* can be rigid and constraining / deny individual freedom

Term
Coordination by Consent
Definition

agreement among a group of people reached through discussion or negotiation

 

*Pro* allows for more flexibility and individual freedom that "custom"

 

*Con* very time consuming

Term
Administrative Agency Coordination 
Definition

a means of organizing an economic unit that gives decision-making authority to some person or agency

 

*Pro* make better-informed decisions than an individual would 

 

*Con* the cost of gathering info would be too high

Term

Market Failure

 

 

Definition
when markets yield inefficient or inappropriate outcomes
Term
Demand Curve
Definition
a curve indicating the quantities that buyers are ready to purchase ar various prices
Term
Quantity Demanded
Definition
movement along a demand curve in response to a price change
Term
Non-Price Determinants of Demand
Definition

1) tastes / preferences

2) income / wealth

3) expectations about future prices and incomes

4)price of related goods (complements vs. substitutes)

5)number of buyers in the market

Term

Supply Schedule

 

Definition
relationship between price and quantities, keep all else constant
Term
Supply Curve
Definition
graphical / mathematical representation of the supply schedule
Term
Non-Price Determinants of Supply (shifters)
Definition

1) price of inputs / resources

2) technology

3) expectations

4) price of related goods (goods that can be made with the same inputs)

5) number of producers in the market

 

Term
Equilibrium 
Definition
a situation of rest, in which there are no forces that create change
Term
Shortage
Definition
the quantity that buyers wish to buy at the stated price is greater than the quantity that sellers are willing to sell at that price
Term
Surplus
Definition
the quantity that sellers wish to sell at stated price is greater than the quantity that buyers will buy at that price
Term
Signaling
Definition
to carry information throughout the economy
Term
Rationing
Definition
to determine who gets what
Term
Price Floor
Definition
A law or agreement that puts a lower limit on prices
Term
Price Ceiling
Definition
a law or agreement that puts a max on prices
Term
Inadequacy
Definition
there is not enough of a good or service, provided at prices people can afford to meet minimal requirements for human well-being
Term
Shortage
Definition
willing and able buyers are not able to find goods to buy at the going price
Term
Opportunity Cost
Definition
what yo have given up by making a decision / the value of your next best alternative 
Supporting users have an ad free experience!