HSP4U

What are the two main studies of economics?

Microeconomics and Macroeconomics

What does microeconomics focus on?

The different parts of the economy, such as consumers, business, labour, government

What does macroeconomics focus on?

larger trends, such as overall performance, recessions, surpluses, interest rates, trade

What are the inputs of an economy (economic resources)

Skills of people, equipment, natural resources, labour

What does labour include?

Manual labour, skilled work, management, professional services

What is capital equipment?

Tools, equipment, machinery, factories, technology

What can capital investment increase?

Productivity/output per worker

What does increased productivity yield?

A higher standard of living, more goods per person

What is natural resources?

Land, resources on the land (oil, agriculture, timber, etc.)

What are the outputs in an economy?

Goods and services

What is an economic system?

A method used by society to produce and distribute goods and services

What are the 2 main types of goods produced?

Capital goods and consumer goods

What are consumer goods?

Food, clothing, games, etc. Used in the present

What are capital goods?

Tools, equipment, machinery, used to make consumer goods. Used for future production

What is the basic operation of an economic system?

Inputs (raw materials, machines, labour) —> Conversion Process (manual, mechanical, or chemical) —> Output (finished goods and services)

What is opportunity cost?

The sacrifices and gains analysis of one choice over the other

What is scarcity?

Inputs are limited, and the demand for goods and services is limitless, therefore making inputs scarce

What is effectiveness?

Producing goods and services that are needed and wanted

What is efficiency

High volume of output, for a low production cost

What are the three basic economic questions?

1. What goods and services should we produce?

2. What production methods should we use?

3. How should we divide up our output of goods and services among ourselves?

What is canada’s GDP?

2.2 trillion

What type of economy is Canada?

A mixed economy

What percent of Canada’s economy is free enterprise?

80%

What percent of Canada’s economy is government sector?

20%

What is an economic system based off of?

Profit motive

What is profit motive?

The end goal of all businesses and individuals is to make profit, being money,