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Definition
allocative: the situation in which the quantities if goods and services produced are those that ppl value most highly production: the situation in which more than one good or service can be produced w/o |
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Term
| efficient use of resources |
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Definition
when goods and services are the ones that people value most highly, basically when resources are allocated efficiently. Ex. items that people want and need |
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Term
| us circular flow model to provide picture of how households firms and governments react |
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Definition
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Definition
| the explanation for the economy being equal... proportional to how economy is fluctuating |
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Governments role in the economy |
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Definition
the fed! the central bank of the united states 13 fed banks that supply banks and credit unions the fed accomplishes its job by adjusting interest rates, improve the economy, hold down inflation, maintain employment and economic growth. FOMC - responisble for adjusting economic policy and interest rate fluctuation Role of fed chair - not only see to the nation but internationally also |
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Term
| how does the ppf illustrate the economic problem |
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Definition
The ppf is the boundary between combinations of goods & services that can be produced and not be produced The ppf illustrates the economic problem though how it allows us to compare two goods or services and discover their economic possibilities: attainable and unattainable combinations. |
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Term
Define economics and explain the kinds of questions economists try and answer |
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Definition
Economics is the social science that studies the choices individuals, businesses, governments, and societies make while facing scarcity and incentives that sway their choices - How choices determine what, how, and for whom
- When are choices made in self pursuit or social interest
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Term
| 5 Core Ideas of Economic Thinking |
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Definition
1. People making rational choices using cost evaluation
2. Cost of a good or service - must
3. Benefit - Wiling to give to gain
4. Rational choices made on margin - comparing all relevant alternatives
5. Choices responding to incentives |
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| Role of incentives in rational choices |
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Definition
| .... rational choice: choice made by comparing costs and benefits |
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Term
| Difference between quantity supplied and supply |
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Definition
Quantity supplied: things remain the same when qs increases but decreases if the price falls because of increasing opportunity cost.
Supply - the relationship between the qs and the price of a good when all other influence on selling plans remain the same. |
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