ECON 2100 Midterm Exam Study Outline Flashcards

Vocabulary flashcards covering introductory economics, macroeconomics, growth, and labor market concepts for the ECON 2100 midterm.

Economics

The study of how people make choices to allocate scarce resources.

Scarcity

A problem because resources are limited while human wants are unlimited.

Division of labor

Splitting tasks among workers.

Specialization

Focusing on a specific task to increase efficiency and productivity.

Economies of scale

Occur when average costs decrease as production increases.

Microeconomics

Studies individuals and firms.

Macroeconomics

Studies the economy as a whole.

Monetary policy

Controls money supply and interest rates.

Fiscal policy

Involves government spending and taxes.

GDP

The total value of final goods and services produced within a country in a year.

Imports

Goods bought from other countries.

Exports

Goods sold to other countries.

Underground economy

Economic activity that is hidden from the government to avoid taxes or regulations.

Opportunity cost

The value of the next best alternative given up when making a choice.

Marginal analysis

Comparing additional benefits and additional costs when making decisions.

Utility

The satisfaction gained from consuming goods or services.

Law of diminishing marginal utility

As more units are consumed, the additional satisfaction from each extra unit decreases.

Sunk costs

Costs that have already been paid and cannot be recovered.

Productive efficiency

Producing at lowest cost.

Allocative efficiency

Producing what consumers want most.

Comparative advantage

The ability to produce a good at a lower opportunity cost than another producer.

Positive statements

Factual statements.

Normative statements

Opinion-based statements.

Law of demand

As price increases, quantity demanded decreases, ceteris paribus.

Law of supply

As price increases, quantity supplied increases, ceteris paribus.

Equilibrium

Where quantity demanded equals quantity supplied.

Surplus

Occurs when quantity supplied exceeds quantity demanded.

Shortage

Occurs when quantity demanded exceeds quantity supplied.

Ceteris paribus

Means 'all other things held constant.'

Supply curve shifts

Caused by production costs, technology, taxes, subsidies, expectations, and number of sellers.

Deadweight loss

A loss of economic efficiency caused by market distortions.

Macroeconomic Goals

Include economic growth, low unemployment, stable prices, and trade balance.

Recession

A decline in economic activity.

Depression

A severe long-lasting recession.

Exchange rates

The value of one currency compared to another.

Economic growth

An increase in production of goods and services over time.

Industrial Revolution

A period of rapid industrialization beginning in the late 1700s.

Capital deepening

An increase in capital per worker.

Convergence

Poorer economies may grow faster than richer economies over time.

Labor force

People employed or actively seeking work.

Underemployed

Workers employed below their skill level or part-time involuntarily.

Sticky wages

Wages do not adjust quickly downward.