Economics unit 1 study unit

Economics

The social science that studies how people cope with the ever-present problem of scarcity.

Scarcity

The fundamental economic problem of having limited resources but unlimited wants.

Opportunity Cost

The alternative that is sacrificed when a choice is made.

Law of Diminishing Returns

After a certain point, adding more resources does not significantly increase output and may even decrease efficiency.

Law of Increasing Returns to Scale

Increasing all resources leads to greater output than expected due to improved efficiency.

Tangible Goods

Physical products such as cars and food.

Intangible Goods

Non-physical products such as services and digital products.

Factors of Production

Economic resources categorized as Land, Labor, Capital, and Entrepreneurship.

PPC Curve

A graphical representation showing the maximum quantity of goods and services that can be produced with available resources.

Microeconomics

The branch of economics that studies individual economic units.

Macroeconomics

The branch of economics that examines the economy as a whole.

Consumer Sovereignty

The concept that consumers determine what gets produced through their purchasing choices.

Positive Statement

A fact-based statement that can be tested or proven with evidence.

Normative Statement

An opinion-based statement that reflects values and cannot be tested.

Government Intervention

Government involvement in the economy to influence markets or achieve economic goals.

Paradox of Value

The concept that some goods have high economic value despite being less essential than other goods.

Fallacy of Composition

Assuming that what’s true for one part must be true for the whole.

Fallacy of Single Causation

Blaming a complex event on just one cause when many factors are involved.

Economic Value

The worth of a good or service based on people's willingness to pay for it.

Price Stability

An economic condition where prices remain relatively stable over time.

Economic Growth

An increase in the production of goods and services in an economy over time.

Economics is the social science that studies how people cope with the ever-present problem of ________.

scarcity.

The fundamental economic problem of having limited resources but unlimited ________ is known as scarcity.

wants.

The ________ that is sacrificed when a choice is made is known as opportunity cost.

alternative.

After a certain point, adding more resources does not significantly increase output and may even decrease ________.

efficiency.

Increasing all resources leads to greater output than expected due to improved ________.

efficiency.

Physical products such as cars and food are referred to as ________ goods.

tangible.

Non-physical products such as services and digital products are known as ________ goods.

intangible.

Economic resources categorized as Land, Labor, Capital, and ________ are known as factors of production.

Entrepreneurship.

A graphical representation showing the maximum quantity of goods and services that can be produced with available ________ is called the PPC curve.

resources.

The branch of economics that studies individual economic ________ is microeconomics.

units.

The branch of economics that examines the economy as a ________ is macroeconomics.

whole.

The concept that consumers determine what gets produced through their purchasing ________ is known as consumer sovereignty.

choices.

A ________-based statement that can be tested or proven with evidence is called a positive statement.

fact.

An opinion-based statement that reflects values and cannot be tested is known as a ________ statement.

normative.

Government involvement in the economy to influence markets or achieve economic ________ is referred to as government intervention.

goals.

The concept that some goods have high economic value despite being less essential than other goods is known as the ________ of value.

paradox.

Assuming that what’s true for one part must be true for the ________ is called the fallacy of composition.

whole.

Blaming a complex event on just one cause when many factors are involved is known as the ________ of single causation.

fallacy.

The worth of a good or service based on people's willingness to pay for it is referred to as economic ________.

value.

An economic condition where prices remain relatively ________ over time is known as price stability.

stable.

An increase in the production of goods and services in an economy over time is referred to as economic ________.

growth