Studied by 9 people
Topic 1: Economic Activity Topic 2: The Factors of Production Topic 3: Making Choices
Economics
The study of how people, corporations, and the government make decisions to satisfy people's needs and wants.
Macroeconomics
The study of economics about the general overview of the economy, focusing on growth, unemployment, and inflation.
Microeconomics
The study of individuals and companies interacting to support the supply and demand of resources.
Scarcity and Choice
The challenge of having unlimited wants with limited resources.
Rational Behavior
The concept that individuals aim to maximize satisfaction, while companies aim to maximize profits.
Marginal Analysis
Evaluating the difference between extra benefits and extra costs.
Economic Growth
Increasing goods and services compared to the population.
Full Employment
Ensuring all willing individuals are employed.
Economic Efficiency
Maximizing output from limited resources and reducing waste.
Price Stability
Maintaining stable prices to avoid inflation or deflation.
Economic Freedom
Allowing individuals to spend, produce, and work as they choose.
Equitable Distribution of Income
Striving for minimal inequality to ensure a good standard of living for all.
Economic Security
Protecting individuals from unemployment or financial crises.
Balance of Trade
Achieving a balance between imports and exports to minimize surpluses or deficits.
Needs vs Wants
Needs are necessities for survival, while wants are desires for pleasure.
Purpose
Economic activity aims to produce goods and fulfill people's needs and wants.
Economic Decision
Involves determining what to produce, how to produce it efficiently, and who will benefit.
Consumers
Individuals who purchase goods or services.
Producers
Entities that create or provide goods and services.
Government
Oversees interactions between consumers and producers and collects taxes.
Economic Resource
Resources that determine what, how, and for whom goods or services are produced.
Resources Used in Production
Factors like money and time that influence production methods.
Land
Available land impacting production decisions.
Labor
Human effort put into work.
Capital
Money available for investment in production.
Enterprise
Skills used to optimize land, labor, and capital.
Choices
Decisions weighed by potential costs and benefits.
Costs
Sacrifices made to reach a decision.
Benefits
Gains from making a decision.
Opportunity Cost
The value of the next best alternative foregone when a decision is made.
Law of Increasing Opportunity Act
When the production of a good increases, the opportunity costs of that good for an additional unit rise.
Normative Econ
The things a government should do to reach a goal.
Policy Econ
Developing a policy to a economic problem.
Positive Econ
Facts describing economic phenomena’s.
Theoretical Econ
Models made based on logic and assumptions, like the Keynesian theory.
Inductive Econ
Researching patterns to make laws or theories.
Deductive Econ
Using theories to make specific conclusions.
Market Economy
Prices are determined by supply and demand, there is minimum government intervention (USA, Singapore).
Command Economy
The government has a large control over what and how things are being made (North Korea).
Mixed Economy
Mix of both command and market economies, both supply and demand play a role (UK, France).
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