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What is the study of economics primarily concerned with?
The study of choice under the conditions of scarcity.
What is an individual choice in economics?
Decisions made by individuals about allocating limited resources.
Define tradeoffs in economics.
Giving up one thing to get something else.
What does opportunity cost represent?
The value of the next best alternative foregone when a choice is made.
What is a resource in economic terms?
Anything that is used to produce something else.
What does microeconomics focus on?
Smaller concerns that affect individuals, families, or businesses, focusing on specific goods, markets, and individual decision makers.
What are the four broad economic systems?
Traditional, Command, Market, and Mixed.
What is a market economy?
A system where most key economic decisions are made by business owners and consumers.
Who is considered the father of capitalism?
Adam Smith.
What distinguishes a command economy?
Central planners (government) make the important decisions about what, how, and for whom to produce.
What is socialism in economic terms?
An economic system where most resources and businesses are publicly owned and economic decisions are made by groups of workers and consumers.
Define traditional economy.
Economic decisions made by habit, custom, superstition, or religious tradition.
What is marginal analysis?
The examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.
What are property rights in economics?
Socially enforced constructs for determining how a resource or economic good is used and owned.
List the three types of property.
Public Property, Common Property, and Private Property.
What does the Fifth Amendment takings clause state?
Private property shall not be taken for public use without just compensation.
What is a competitive market characterized by?
Many buyers and sellers and identical goods or services.
What does the law of demand state?
There is an inverse relationship between price and quantity demanded.
What is a demand curve?
Graphical representation of the demand schedule, showing how much of a good or service consumers want to buy at any given price.
What are substitutes in economics?
Goods that can be used in place of another and are perceived as similar or comparable.
Define complements.
Two goods that, when the price of one falls, make people more willing to buy the other good.
What is indicated by a shift of the demand curve?
A change in quantity demanded at any given price.
What does the law of supply state?
There is a positive relationship between price and quantity supplied.
Name one of the shifters of the supply curve.
Cost of inputs.
What happens when there is an increase in demand?
The demand curve moves up and to the right.
What changes movement along the demand curve?
A change in the quantity demanded resulting from a change in that good’s price.
Can price shift the supply curve?
No, price never shifts the curve.
What leads to a movement along the supply curve?
A change in the price of the good or service being supplied.
