econ unit 1 quiz lectures 1-4

economy

any system of consumption and production in which wealth is produced

goods

physical items produced in an economy, such as guns and butter

services

actions/activities done for others for a fee

economics

the study of production, consumption, and distribution of goods using society’s scarce resources

scarcity

an economy’s limited resources outweighed by unlimited wants

wants

things not vital to life, but are desired

needs

things necessary for survival

marginal benefit

the measure of how much additional benefit is by adding/subtracting one additional unit

marginal analysis

a specific analysis about the cause and effect of the addition or subtraction of one unit

competition

the efforts of two or more entities (people, companies, governments) to secure resources that are naturally limited

cost-benefit analysis

the entity making the decision has to assess the cost it will incur versus the anticipated benefits to gain

choice

an act of selecting a decision when faced with two or more possibilities

trade-off

a choice between two alternatives (the value of the opportunity cost)

opportunity cost

benefits given up by making a decision

utility

the satisfaction or perceived ability of something to satisfy wants and needs

allocative efficiency

a situation when consumers are all paying the lowest possible prices and producers are capable of supplying at that price to do so

traditional economy

an economy that relies on customs and past practices to answer the questions of the economic system

command economy

an economy that relies on powerful government officials using central planning to make economic decisions

market economy

an economy that relies on individuals to make all economic decisions

mixed economy

an economy that combines aspects of market and command economies

microeconomics

the study of how the individual people and business make decisions and how those decisions affect others in the economy

macroeconomics

the study of economies as a whole

marginal cost

the measure of how much additional cost is added in one additional unit

marginal analysis

the conscious deliberation of the marginal benefit and marginal cost engaged by everyone

classical

an economic school in which markets and economies self-regulate, forcing individuals to make rational decisions based on their best interests

marxism

an economic school with the belief that workers revolt against their owners to control the means of production so that the resources are distributed equally

Keynesian

an economic school that serves as an antidote to boom and bust cycles in unregulated economies and achieves this by government involvement to alleviate recessions

Behavioral

an economic school that combines psychology and neurology with economics and decisions made by consumers in this type of economy go against the beliefs of classical economics

economic system

An organized set of procedures and practices a society follows in the production, distribution, and consumption of goods.