Economics Flashcards - Cram.com
by mercercelina9, Dec. 2008
Subjects: coyne econ economics
study of choices people make to satisfy their needs and wants
one who studies economics
study of choices made by economic actors (households, companies, etc)
study of behavior of whole economics
people who decide to buy things
make the things that satisfy the consumer's wants and needs
physical objects that can be purchased
actions or activities performed for a fee
anything people use to make or obtain what they need or want
resources used to produce goods and services (natural, human, capital resources, and entrepreneurship)
items provided by nature that can be used to produce goods and provide services
any human effort exerted during production
manufactured materials used to create products
buildings, structures, machinery, tools used in production process
use of technical knowledge and methods to create new products or make existing products more efficiently
organizational abilities and risk taking involved in starting a new business or introducing a new product
the condition that results from the combination of limited economic resources and unlimited wants
distribute (as in resources)
assigning a small number of tasks to each worker
process in which workers gain expertise in the assigned tasks (allows worker to work faster and produce more).
3 questions all economic systems address?
one good sacrificed for another
cost of tradeoff; value of the next best alternative given up to obtain an item
shows all of the possible combinations of two goods or services that can be produced within a stated time period given an unchanging of resources and technology and most efficient processes are being utilized
(point lying inside or below the production possibilities curve represents inefficient use of existing resources)
five broad goals of an economic system?
economic freedom, efficiency, equity, security, growth
circular flow of production in resource market?
households give productive resources to business
business gives money-income payment
circular flow of production in product market?
households give money payments to business
business gives goods and services
father of economics, "The Wealth of the Nations", invisible hand, no govt regulation
Das Kapital, get rid of economic classes, anti-capitalism
lowest possible level of unemployment in the economy (4%)
achieved when overall prices levels of the goods and services available in the economy are relatively constant
people's economic well-being
determined by tradition
determined by individuals
determined by govt officials
govt controls some
process of supply and demand that could guide the economy without govt regulation
market system requirement
2. profit motive (invisible hand)
4. freedom of exchange
command economies: govt controls services more or less
command economies: govt controls majority of everything
process in which producers and consumers agree to provide one type of item in return for another
(barter, money, credit)
amount consumer willing/able to buy at various possible prices during a given time period
amount demanded at each particular price
increase in a good's price causes a decrease in quantity demanded and vice versa (charts from food court)
money to spend on goods/services
increase/decrease in purchasing power cause by change in price
tendency of consumers to substitue a similar, low-priced product for a more expensive one
(useful to a point) as a product is used, it becomes less satisfactory, more useful
relationship between price of product/quantity demanded
causes shift of ENTIRE curve at all prices:
-consumer tastes/preferences
-prices of related goods
can be used to replace purchase of similar goods when prices rise
goods commonly used w/ other goods
degree to which changes in a good's price affect quantity demanded by consmers
small change in price causes major change in quantity demanded (nonessentials)
change in price has little impact (essentials)
total income from selling its products
quantity producers willing to offer at possible prices
supply at each price
more goods and service when at higher prices (benefit producers)
revenue - costs = P
cost of production (wages, rent, bills, materials)
degree to which price changes affect quantity supplied
small price change causes major change in quantity supplied
price change doesn't affect (requires lots of time, money, resources)
nonprice factors, shifts ENTIRE supply curve
-prices of resources
-government tools
-producer expectation
with each additional input, output increases up to a point (starbucks and employees) --> too many is inefficient
do not change as level of output changes (rent)
lessening in value
company's total fixed costs
change as level of output changes (wages, materials)
quantity supplied = quantity demanded at same price
when quantity supplied exceeds quantity demanded at a certain price
when quantity demanded exceeds supplied at price
government reg. establishes maximum price (rent control) (protects consumers)
minimum level for prices (minimum wage) (protects producers)
government decides how to distribute a product
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