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Why is Economics important?
Helps understand resource allocation, market functions, and decision-making.
Why is Choice at the Margin important?
Helps people make more efficient decisions about the use of factors of production
Why is Ceteris Paribus important?
explains that not everything in an economy can be tested
What is Economic System?
how resources are owned and allocated within the economy
Why is Economic System importance?
shapes the structure of nation economy and the standard of living for the people
What is Short Run?
Planning period where at least one factors of production is fixed
What is Long Run?
Planning period where all factors of production are variable
Describe Circular Flow Model
Constant cycle of exchanging resources between producers and consumers, where producers are also consumers
Why is Circular flow model important?
Helps understand how the economy operates and how they relate to to each other
What is Imperfect Competition? Provide Ex as well
Multiple firms competing where at least one is a price setter, EX Airlines
What is Economies of Scales?
A firm average cost of production decreases as it produces more output
Why is Economies of Scales important?
Allows firms to reduce cost as production expands
what is Law of Diminishing Utility?
At a certain point, the more you do it the less benefit you gain
What is efficient? verbatim
Refers to the allocation of resources, when net benefits of all economic activities are maximized
What is Fixed Factors of Production?
Resources cannot be changed easily in the short run, regardless of production levels
