Intro to Econ Test
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100 Terms
Be able to do the OC and OB for this graph
🙂
what two points represent “All or Nothing”
A and O
Points B-N can all be called by what formal name?
efficient
what is the proper name for Line AO
frontier
define “thinking at the margin”
movement along the frontier line between any 2 points in either direction
what boy band from the early 2000s had a hit single with the line “…All or Nothing at All”
O-Town
1 A
household
1 B
firm
1 C
$ purchases
1 D
goods and services
1 E
FOP
1 H
Factor Market
1 G
Product Market
1 F
$ wages/salary
which economy is Circular Flow Chart #1 for?
market economy
3A
household
3B
government
3C
firm
3D
$ wages/salary
3E
FOP
3F
$ purchases
3G
goods and services
3M
Product Market
3L
Factor Market
3K
gov FOP
3J
taxes
3I
gov purchases
3H
taxes
3 is a Circular Flow Chart for which Economy?
Mixed
terms: the social science that deals with how a society allocates its scarce resources among its unlimited wants and needs
economics
terms: goes on the axis of a PPG
goods/services
terms: the most desirable alternative given up as a result of a decision
opportunity cost
terms: the odd way to describe a society’s trade-off
Guns or Butter
terms: central to a society in a traditional economy
family unit
terms: the concentration of productive efforts on a limited number of activities
specialization
terms: the doctrine that states that the gov should generally not intervene in the marketplace
Laissez Faire
terms: the process of choosing which needs to be satisfied and how much of our resources will be used to satisfy them
allocation
terms: the line connecting all the “normal” points on a PPG
frontier
terms: all natural resources in an economic sense
land
terms: the combination of social and individual decision making a society uses to answer the basic economic questions
economic systems
terms: those that buy and use goods and resources
consumers
terms: a graph showing the alternative ways an individual or society uses its resources
PPG
terms: human made/based resources used to produce other goods and services
capital
terms: using more human labor than machines
labor intensive
terms: how labor is divided in a traditional economy
gender lines
terms: exchange from firm to household
product market
terms: when a good becomes outdated or non-functional after a short or unspecified time
planned obsolesence
terms: that which we desire but is not essential for survival
want
terms: the skill in acquiring and managing the factors of production
entrepreneurship
terms: the skills and knowledge gained by a worker through experience
human capital
terms: three economic questions answered by the gov
Command (Centrally Planned) Economy
terms: money gained before costs
revenue
terms: expectation, good or bad, that encourages a certain behavior
incentive
terms: when a good is long lasting
durable
terms: condition when a good or service is unavailable at the current price
shortage
terms: action or activity one person performs for another
service
terms: effort a person devotes to a task for which they are paid
labor
terms: all human made objects used to create other goods and services
physical capital
terms: using more machines than human labor
capital incentive
terms: three economic questions answered by social customs, habit, and ritual
traditional economy
terms: person or group in the same residence
household
terms: exchange from household to firm
factor market
terms: one’s personal gain
self-interest
terms: struggle among firm for household money
competiton
terms: physical object a person buys and uses
good
terms: those things necessary for survival
needs
terms: condition when wants and needs are unlimited but resources need to produce goods and services to meet those wants and needs are limited
scarcity
terms: financial gain in a transaction after costs
profit
terms: self-regulating nature of the marketplace
Invisible Hand
terms: motivating force in a free market economy
self-interest
terms: organizations that use resource to produce and sell
firms
what is the major difference (in terms of time) between scarcity and shortage?
scarcity is forever, shortages are temporary
what are the Four Factors of production?
land, labor, capital, and entreprenuership
what two things help determine for whom goods and services will be produced?
consumers’ preferences and spending habits an prices
what are the three basic economic questions?
what goods/services will be produced?
Howwill goods/ services be produced?
For whom will goods/services be produced?
what are the four basic economic systems
traditional economy
command (Centrally Planned) Economy
market economy
mixed economy
what are the four rules of a market economy?
self-interest
incentive
competition
invisible hand
what are the sacred rules of a PPG?
always go in the order specified
cost is what you lost… benefit is what you git
answer will have 2 parts: a # and a g/s
it helps to draw arrows
what is the only rule of an economic circular flow chart?
money always goes on the outside
What is the formula for finding profit?
Profit=Revenue - Cost
Type of Economy: the 3 Qs decided by social customs, habit, and ritual
traditional
Type of Economy: most stagnant - little room for change (farming, hunting, and gathering)
traditional
Type of Economy: lack of safety net
traditional
Type of Economy: family unit is central
traditional
Type of Economy: labor is divided by gender lines
traditional
Type of Economy: the 3Qs decided by the gov
command
Type of Economy: gov control of land and labor
command
Type of Economy: the 3Qs decided by individual consumers and producers in the economic arena
market
Type of Economy: specialization
market
Type of Economy: household and firm
market
Type of Economy: product market (exchange is from the firm to the household)
market
Type of Economy: factor market (exchange is from the household to the firm)
market
Type of Economy: goal is profit and revenue
market
Type of Economy: the 3Qs a combo of market decision making and gov order
mixed
Type of Economy: most modern economies
mixed
Type of Economy: Laissez Faire
mixed
RoaME: Self-Interest
one’s personal gain
the motivating force in a free market
RoaME: incentive
expectation, good or bad, that encourages a certain behavior
household=lower price
firm=greater profit
RoaME: competition
struggle among firms for household $
RoaME: “Invisible Hand”
self-regulating nature of the market