Introduction to Microeconomics

These flashcards encompass key terms and concepts from the introduction to microeconomics, including definitions of economic principles and distinctions between different economic systems.

Economics

A social science that studies how people and society organize scarce and limited resources to satisfy unlimited human wants.

Microeconomics

The study of individual and specific economic units.

Macroeconomics

The study of economics as a whole.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Opportunity Cost

The value of the next best alternative forgone when making a decision.

Production Possibility Curve (PPC)

A graph that shows the alternative combinations of two goods that can be produced with the existing resources and technology.

Factors of Production (FOP)

The resources or inputs used to produce goods and services, including land, labor, capital, and entrepreneurship.

Entrepreneur

A person who organizes and manages the factors of production and takes on the risks of a business.

Wages

The return to labor, typically in the form of payments made to workers.

Rent

The return to land.

Interest

The return to capital.

Consumer Sovereignty

The power of consumers to determine what goods and services are produced.

Capitalist Economy

An economic system characterized by private ownership of resources and minimal government intervention.

Socialist Economy

An economic system where the government makes all economic decisions and owns all resources.

Mixed Economy

An economic system that includes both private and public enterprise.

Economic Problems

The fundamental questions of what to produce, how to produce it, and for whom to produce it.