IB Econ Unit 1

Ceteris Paribus

________ is that all other things remain the same.

Utility

________ is a measure of usefulness and pleasure.

Labor

________ is all the human time, effort, skill, and talent that is involved in the production process.

Adam Smith

________ is known as the father of modern economics and he criticized mercantilism (which was the idea that raw materials were thought as wealth or colonies)

Inefficiency

________ or underutilization means producing fewer goods and services than possible.

Equity

________ is fairness versus equality which is being the same.

Value judgement

________ is an evaluative statement of how good or bad you think an idea or action is.

Entrepreneurs

________ bring the idea /vision to fruition and are visionary, innovative, and willing to take risk.

PPC

________ depicts the effects of scarcity on production.

Government

________ makes product, wage, and price decisions.

Incentives

________ are benefits offered to encourage people to act a certain way.

Comparative advantage

________ is when one nation can produce a good with a lower opportunity cost that another.

Capital

________ are the human- made resources that are used to produce or distribute other goods and services.

Opportunity cost

________ is the value if what is given up to get what is wanted.

Merit goods

________ may be underproduced while demerit goods may be overproduced.

Absolute advantage

________ is when one nation can produce a good more efficiently than another nation.

political freedom

In Communism, there is little to no ________ and all property is government owned.

economic model

A(n) ________ is a simplified representation of economic forces.

Free goods

________ are unlimited goods that have no opportunity cost.

economic statement

A(n) ________ which is a fact is a positive statement.

Democratic socialism

________ is a form of socialism which is established through the democratic political process.

Marginal cost

________ is the cost of using one or more additional units of the good or service.

Free market economies

________ have limited government involvement, hold consumer sovereignty, and profit motive is the incentive for producers.

ppc

The ________ represents the maximum number of products an economy can produce.

marginal cost

If ________ is greater than marginal benefit, then an additional unit is not consumed.