Shared Flashcard Set

Details

exam 1
N/A
49
Economics
Post-Graduate
06/01/2013

Additional Economics Flashcards

 


 

Cards

Term
two types of economic systems that exist today are
Definition
market systems and command systems
Term
distinguishing feature of a command system
Definition
central planning
Term
distinguishing feature of a market system
Definition
wide-spread private ownership of capital
Term
an economic system
Definition
is a particular set of institutional arrangemants and a coordinating mechanism used to respond to the economizing problem
Term
economic systems differ according to what two main characteristics
Definition
who owns the factors of production and the methods used to coordinate economic activity
Term
fundamental characteristic of the market system
Definition
property rights
Term
copyrights and trademarks are examples of
Definition
property rights
Term
the pursuit of self-interest
Definition
gives direction to the market system
Term
the regulatory mechanism of the market sytem is
Definition
competition
Term
broadly defined, competition involves
Definition
independently acting buyers and sellers and freedom to enter or leave markets
Term
competition means that
Definition
there are independently-acting buyers and sellers in each market
Term
well defined property rights
Definition
encourage owners to maintain or improve their property
Term
specialization-the divisiion of labor-enhances productivity and efficieney by
Definition
all of the above
Term
specialization in production is economically beneficial primarily because it
Definition
permits the production of a larger output with fixed amounts of resources
Term
from society's point of view the economic function of profits and losses is to
Definition
reallocate resources from less desired to more desired uses
Term
in a market economy a significant change in consumers' desire for product X will
Definition
all of the above
Term
the economic function of profits and losses is to
Definition
signal that resources should be reallocated
Term
the competitive market system
Definition
encourages innovation because successful innovators are rewarded with economic profits
Term
in a competitive market economy firms will select the least-cost production technique because
Definition
"dollar voting" by consumers mandates such a choice
Term
the market system's answer to the fundamental question "what will be produced?" is essentially
Definition
"goods and services that are profitable"
Term
the simple circular flow model shows that
Definition
households are on the selling side of the resource market and on the buying side of the product market
Term
the market system's answer to the fundamental question "how will the goods and services be produced?" is essentially
Definition
"at least-cost production"
Term
the market systems answer to the fundamental question "who will get the goods and services?"
Definition
"those willing and able to pay for them"
Term
""""How will the system accommodate change?"
Definition
"through the guiding function of prices anf the incentive function of profits"
Term
"how will the system promote progress?"
Definition
"through the profit potential that encourages development of new technology"
Term
the dollar votes of consumers ultimately determine the composition of output and the allocation of resources in a market economy.This concept best describes
Definition
consumer sovereignty
Term
the invisible hand refers to the
Definition
notion that, under competition, decisions motivated by self interest promote the social interest
Term
the market system
Definition
effectively hernesses the incentives of workers and entrepreneurs
Term
"utility"
Definition
pleasure and satisfaction
Term
when economists say that people act rationally in their self interest they mean that individuals
Definition
look for and pursue opportunities to increase their utility
Term
according to economists,economic self-interest
Definition
is a reality that underlies economic behavior
Term
a person should consume more of something when its marginal
Definition
benefit exceeds its marginal cost
Term
economics may best be defined as the
Definition
social science concerned with how individuals,institutions,and society make optimal choices under conditions oc scarcity
Term
the economic perspective refers to
Definition
the making of purposeful decisions in a context of marginal costs and marginal benefits
Term
purposeful behavior suggests that
Definition
indivduals will make different choices because of different desired outcomes
Term
economics involves marginal analysis because
Definition
most decisions involve changes from the present situation
Term
you should decide to go to a movie
Definition
if the marginal benefit of the movie exceeds its marginal cost
Term
marginal costs exist brcause
Definition
the decision to engage in one activity means forgoing some other activity
Term
the assertion that 'there is no free lunch' means that
Definition
all production involves the use of scarce resources and thus the sacrifice of alternative goods
Term
consumers spend their income incomes to get the maximum benefit or satisfaction from the goods and services they purchase.This is a reflection of
Definition
purposeful behavior
Term
in deciding whether to study for an economics quiz or go to the movie,one is comfronted by the ideas of
Definition
scarcity and opportunity costs
Term
economics models
Definition
emphasize basic economic relationships by purposefully simplifying the complexities of the real world
Term
macroeconoomics approaches the study of economics from the viewpoint of
Definition
the entire economy
Term
microeconomics is concerned with
Definition
a detailed examination of specific economic units that make up the economic system
Term
the economizing problem is one of deciding how to make the best use of
Definition
limited resources to satisfy virtually unlimited wants
Term
the scarcity problem
Definition
persists because economic wants exceed available productive resources
Term
the four factors of production are
Definition
land,labor,capital,and entrepreneurial ability
Term
money is not an economic resource because
Definition
money,as such, is not productive
Term
a direct cost of going to college is
Definition
tuition,while an indirect cost(opportunity cost)is forgone income while in college
Supporting users have an ad free experience!