Introduction to Economics

These flashcards cover key concepts from the Introduction to Economics, including micro and macroeconomic perspectives, economic systems, and the principles of demand and supply.

What is the primary focus of economics as a social science?

Economics systematically studies how individuals, organizations, communities, and states allocate scarce resources among competing ends to satisfy unlimited human wants.

What are the key perspectives of economics?

Microeconomic and macroeconomic perspectives.

What does microeconomics study?

Microeconomics studies the behavior of individual decision-making units like consumers, firms, and workers.

What does macroeconomics examine?

Macroeconomics examines the performance and stability of the economy as a whole, focusing on national income, employment, inflation, and overall economic growth.

What are the three basic economic problems every society must address?

What to produce, how to produce, and for whom to produce.

Why is economics classified as a social science?

Because it studies human behavior in relation to the production, distribution, and consumption of goods and services.

What does the term 'scarcity' refer to in economics?

Scarcity refers to the condition where human wants are unlimited while resources are limited.

What is the main objective of firms?

The main objective of firms is profit maximization.

What is the market system?

The market system is an economic system where decisions about production and consumption are made through the interaction of buyers and sellers in markets.

What is the law of demand?

The law of demand states that as price falls, quantity demanded rises, and as price rises, quantity demanded falls, assuming other factors remain constant.

What is the law of supply?

The law of supply states that as price rises, quantity supplied rises, and as price falls, quantity supplied falls, given other factors remain constant.

How are demand, supply, and price interrelated?

Demand and supply determine price, and price influences both demand and supply; they are mutually dependent.

What does environmental economics study?

Environmental economics focuses on the economic implications of environmental degradation and the management of natural resources.

What is Development economics concerned with?

Development economics focuses on economic growth, poverty reduction, inequality, and structural transformation in developing countries.

What role do governments play in macroeconomics?

Governments use fiscal and monetary policy tools to stabilize economies, promote growth, and address economic shocks.

What is the definition of price in economics?

Price is the monetary value placed on a good or service and acts as a signal and incentive in the market.