Chapter 1: Intro to Basic Economic Concepts

0.0(0)
studied byStudied by 0 people
GameKnowt Play
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Card Sorting

1/25

encourage image

There's no tags or description

Looks like no tags are added yet.

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

26 Terms

1
New cards

Economics

Study of how to best fulfill our unlimited wants with our limited or scarce resources.  

2
New cards

Macroeconomics

The study of national and international economic questions and concerns. How do governments decide about their budgets, dealing with inflation, unemployment

3
New cards

Microeconomics

Study of individual economic concerns and questions.

How do individuals decide what to purchase or what action to take?  

How do firms decide how much to produce and at what price to sell?

4
New cards

Marginal Benefit

The additional satisfaction or utility gained from consuming one more unit of a good or service.

5
New cards

Marginal Cost

The additional cost of producing or consuming one more unit of a good or service.

6
New cards

Sunk Costs

costs which have been already spent and cannot be received

7
New cards

Sunk Cost Example

If you paid $20 for a movie but hate it halfway through, the $20 is a ——-don’t stay just because you already paid.

8
New cards

Economic Model

is a simplified version of reality used to test or show a theory. It uses graphs, equations, or assumptions to make the theory easier to understand or predict outcomes.

9
New cards

Economic Model Example

A supply and demand graph is a model that shows how prices and quantities interact in a market.

10
New cards

Economic Theory

is a general explanation of how part of the economy works. It’s like a big idea based on logic, observations, and data.

11
New cards

Economic Theory Example

The law of demand (when price goes up, quantity demanded goes down)

12
New cards

let them go

How should we think about Sunk costs?

13
New cards

Utility

is the satisfaction or happiness a person gets from consuming a good or service.

14
New cards

Utillity

Eating a slice of pizza making a customer feel good

15
New cards

Markets

A collection of buyers and sellers. The interaction of these individuals determines the prices for a particular product along with the amount sold

16
New cards

Local markets

where people in a specific town, city, or region buy and sell things — often in person.

17
New cards

buyers, sellers

Efficient markets should have many —— AND many ——-

18
New cards

Opportunity Cost

The foregone alternative that you have to give up in order to take an action.

19
New cards

Opportunity Cost Example

coming to class costs time which you could spend sleeping

20
New cards

Ceteris Paribus

is a Latin phrase that means "all other things being equal" or "holding other factors constant."

It’s used in economics when you want to focus on the effect of one thing, while assuming that everything else stays the same.

21
New cards

Efficiency

getting the most output from the least input.

22
New cards

Efficiency Example

Imagine a bakery that uses its resources (flour, labor, ovens) in the most efficient way, producing the maximum number of cakes with the least waste or cost.

23
New cards

Equity

making sure everyone has a fair share, even if it means not everyone gets the same amount.

24
New cards

Equity Example

Imagine the government provides more support (like food assistance) to low-income families to ensure they have enough resources.

25
New cards

To think at the margin

means to make decisions by considering the additional (marginal) benefits and costs of doing just a little more or a little less of something, rather than looking at the total or overall situation.

26
New cards
  1. land

  2. labor

  3. capital

  4. technology

WHAT ARE THE ONLY THINGS THAT LEAD TO LONG RUN GROWTH IN AN ECONOMY?

THESE ARE THE SAME THINGS THAT SHIFT THE PPF AWAY FROM THE ORIGIN!