Introduction to Economics

These flashcards cover key terminology and concepts from the economics lecture notes.

Economics

The study of people and their choices, focusing on wealth and human behavior.

Scarcity

The inability to satisfy unlimited wants and needs due to limited resources.

Incentives

Rewards or penalties that encourage an action or discourage one.

Economic Problem

The challenge of reconciling unlimited wants and limited resources.

Opportunity Cost

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

Microeconomics

The study of individual and business choices and how they interact in the market.

Macroeconomics

The study of the economy as a whole, including national and global performance.

Economic Systems

The means by which countries and governments distribute resources and trade goods and services.

Positive Statement

An objective statement that can be tested and validated.

Normative Statement

A subjective statement involving opinions or value judgments that cannot be tested.

Factors of Production

Resources used to produce goods and services, including land, labor, capital, and entrepreneurship.

Self-Interest

A choice made to achieve the best possible outcome for the individual.

Social Interest

A choice made that benefits society as a whole.

The Invisible Hand

A metaphor describing the self-regulating nature of a free market economy.

Trade-Off

An exchange where one thing is given up to obtain another due to scarcity.

Marginal Benefit

The additional benefit gained from an increase in an activity.

Marginal Cost

The increase in opportunity cost from an additional activity.

Ceteris Paribus

A Latin phrase meaning 'all else being equal,' used to isolate the effect of one variable.

Tangible Goods

Physical items that can be purchased to satisfy human needs.

Intangible Services

Tasks performed that are not physical items, such as repairs or haircuts.