Economics Review Flashcards

Flashcards to review basic economics concepts.

What is Economics?

The social science that studies the choices that individuals, businesses, governments, and societies make as they cope with scarcity and the incentives that influence those choices.

What is Microeconomics?

The study of choices that individuals and businesses make, the way these choices interact in markets, and the influence of governments.

What is Macroeconomics?

The study of the performance of the national economy and the global economy.

What causes scarcity?

Unlimited wants and limited resources.

What are the three fundamental economic questions?

What to produce, how to produce, and for whom to produce.

What are the four factors of production?

Land, labor, capital, and entrepreneurship.

What is opportunity cost?

The value of the best alternative sacrificed for a chosen alternative.

What is the Production Possibility Curve (PPC)?

Shows the maximum combination of two outputs an economy can produce in a given period with its available resources and technology.

What shows the different maximum combinations of two products when all resources are employed?

Points on the PPC

Who owns the resources in a command economy?

Government

Who makes decisions in a market economy?

Individuals and firms

What do market economies rely on to make decisions?

Market prices

Who owns resources in a mixed economy?

Individuals and the government

What is the government's main role in a mixed economy?

Setting laws and rules and providing key services

What causes the PPC to shift right?

Technology improves or more resources become available