Economics Chapter 1

Economics

Economics

The study of the choices that individuals and societies make in the production, distribution, and consumption of goods

Economy

system for the production, distribution, and consumption of goods

Common Store System

all people shared equal in food, supplies, shelter, etc.

Pilgrim’s 2nd Economy

they worked for their own benefit; nothing was given for free or without labor

Economists

scholars of the production, distribution, and consumption of goods within an economy

Macroeconomics

the study of national and international economics; large-scale choices and public policies

Microeconomics

specific components within a major economy; how individual choices affect a large economy

Economic Models

the relationship among the various components (characteristics) within an economy

Economic Forecast

Predictions about the future of an economy

Interest rates, growth of wages, unemployment, etc.

Good

A tangible item that an individual wants and is expected to be paid for

Service

intangible goods or actions produced by labor for which people expect to pay

Want

the human desire to have and use a good or service

Market

A mechanism that allows people to exchange goods

Mass Market

very large number of people to whom very large quantities of products are sold

Supply

the amount of a good that is produced or available

Demand

the amount of a good that is desired or bought at a certain price under a certain condition

Work

intelligent or physical labor used in providing a good or service; all good and services must be worked for

Producers

individuals who work to provide goods

Consumers

people who use goods

Economics

What is the study of that material side of life in which everything has to be worked for and paid for

Prodigality

a bad habit of spending more for wants/needs than one can afford

Need

something it would be difficult to live without (usually fewer than wants)

Consumer Goods

directly used by consumers

Technology

industrial skills and scientific methods that make possible efficient production

Value

the worth that a consumer attaches to a good

Utility

usefulness of an item

Scarcity

how much of a good is available to be sold or created

Political Economy

original name of economics due to government influence on economic matters

Carl Menger

What is Diamond-Water Paradox created by