Core Economic Concepts

Flashcards focusing on core economic concepts, definitions, and key terms from the notes.

Microeconomics is the study of __________ and firms and their decision-making processes.

individual consumers

Macroeconomics is the study of the economy as a whole, focusing on __________ like GDP and inflation.

aggregates

The resources used to produce goods and services are known as __________.

Factors of Production

__________ refers to natural resources used in production.

Land

__________ represents human effort used in production.

Labor

__________ are man-made resources used in production, such as machinery.

Capital

__________ involves risk-taking and organization of the other factors of production.

Entrepreneurship

__________ is the condition where limited resources are insufficient to satisfy unlimited human wants.

Scarcity

__________ refers to the practice of maintaining resources so they remain available for the future.

Sustainability

__________ denotes the skills, knowledge, and experience possessed by an individual, seen in terms of their value.

Human Capital

__________ is the value of the next best alternative that is foregone when a choice is made.

Opportunity Cost

__________ describes how resources are distributed in an economy, ideally achieved via Allocative Efficiency where P = MC.

Resource Allocation

The process of combining inputs to create goods or services is known as __________.

Production

__________ illustrates how total national income is shared among households, often shown by a Lorenz Curve.

Income Distribution

A __________ is an economy with minimal government intervention where market forces determine prices.

Free Market

A __________ refers to a Planned Economy where the government controls resources and production.

Command Economy

A __________ combines elements of both market forces and government intervention.

Mixed Economy

Actions taken by the government to affect the economy are termed __________.

Government Intervention

__________ involves the controlled distribution of goods and services.

Rationing

__________ signifies an increase in a country’s real GDP over time.

Economic Growth

A __________ shows the maximum combinations of two goods an economy can produce.

Production Possibility Curve (PPC)