Economic Foundations

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Description and Tags

Topic 1: Economic Activity Topic 2: The Factors of Production Topic 3: Making Choices

41 Terms

1

Economics

The study of how people, corporations, and the government make decisions to satisfy people's needs and wants.

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2

Macroeconomics

The study of economics about the general overview of the economy, focusing on growth, unemployment, and inflation.

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3

Microeconomics

The study of individuals and companies interacting to support the supply and demand of resources.

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4

Scarcity and Choice

The challenge of having unlimited wants with limited resources.

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5

Rational Behavior

The concept that individuals aim to maximize satisfaction, while companies aim to maximize profits.

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6

Marginal Analysis

Evaluating the difference between extra benefits and extra costs.

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7

Economic Growth

Increasing goods and services compared to the population.

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8

Full Employment

Ensuring all willing individuals are employed.

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9

Economic Efficiency

Maximizing output from limited resources and reducing waste.

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10

Price Stability

Maintaining stable prices to avoid inflation or deflation.

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11

Economic Freedom

Allowing individuals to spend, produce, and work as they choose.

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12

Equitable Distribution of Income

Striving for minimal inequality to ensure a good standard of living for all.

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13

Economic Security

Protecting individuals from unemployment or financial crises.

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14

Balance of Trade

Achieving a balance between imports and exports to minimize surpluses or deficits.

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15

Needs vs Wants

Needs are necessities for survival, while wants are desires for pleasure.

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16

Purpose

Economic activity aims to produce goods and fulfill people's needs and wants.

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17

Economic Decision

Involves determining what to produce, how to produce it efficiently, and who will benefit.

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18

Consumers

Individuals who purchase goods or services.

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19

Producers

Entities that create or provide goods and services.

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20

Government

Oversees interactions between consumers and producers and collects taxes.

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21

Economic Resource

Resources that determine what, how, and for whom goods or services are produced.

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22

Resources Used in Production

Factors like money and time that influence production methods.

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23

Land

Available land impacting production decisions.

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24

Labor

Human effort put into work.

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25

Capital

Money available for investment in production.

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26

Enterprise

Skills used to optimize land, labor, and capital.

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27

Choices

Decisions weighed by potential costs and benefits.

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28

Costs

Sacrifices made to reach a decision.

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29

Benefits

Gains from making a decision.

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30

Opportunity Cost

The value of the next best alternative foregone when a decision is made.

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31

Law of Increasing Opportunity Act

When the production of a good increases, the opportunity costs of that good for an additional unit rise.

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32

Normative Econ

The things a government should do to reach a goal.

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33

Policy Econ

Developing a policy to a economic problem.

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34

Positive Econ

Facts describing economic phenomena’s.

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35

Theoretical Econ

Models made based on logic and assumptions, like the Keynesian theory.

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36

Inductive Econ

Researching patterns to make laws or theories.

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37

Deductive Econ

Using theories to make specific conclusions.

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38

Market Economy

Prices are determined by supply and demand, there is minimum government intervention (USA, Singapore).

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39

Command Economy

The government has a large control over what and how things are being made (North Korea).

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40

Mixed Economy

Mix of both command and market economies, both supply and demand play a role (UK, France).

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41

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