eco 1
### Flashcard 1
Q: What is the definition of economics?
A: The study of production, distribution, and consumption of material goods and services in a world of scarce resources.
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### Flashcard 2
Q: What is scarcity?
A: Scarcity occurs when the social desirability for something exceeds its availability.
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### Flashcard 3
Q: What is opportunity cost?
A: The cost of something is what must be given up to get it.
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### Flashcard 4
Q: What does it mean that people respond to incentives?
A: People are motivated by benefits and costs when making decisions.
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### Flashcard 5
Q: What is a private good?
A: Goods provided primarily by businesses for personal use, characterized by rivalry in use and exclusive ownership rights.
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### Flashcard 6
Q: What is a public good?
A: Goods provided mostly by governments or non-profits, non-rival in use, and non-exclusive in ownership.
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### Flashcard 7
Q: What is the difference between community goods and club goods?
A:
- Community Goods: Rival in use, non-exclusive (e.g., public parks).
- Club Goods: Non-rival in use, exclusive (e.g., membership subscriptions).
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### Flashcard 8
Q: Name the four types of scarce resources (capital).
A: Labor, real capital, natural resources, and entrepreneurship.
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### Flashcard 9
Q: What is human capital?
A: Intangible assets like knowledge, abilities, talents, and health that contribute to labor productivity.
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### Flashcard 10
Q: What is real capital?
A: Physical assets like machines, equipment, and buildings used in production.
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### Flashcard 11
Q: What is the definition of value added in production?
A: The numerical difference between the value of final products and the cost of raw materials.
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### Flashcard 12
Q: What are factor payments?
A: Monetary payments to resource owners involved in value creation, including wages, interest, rent, and profits.
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### Flashcard 13
Q: What is the production process?
A: The process of organizing labor, capital, and raw materials to transform them into finished goods or services.
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### Flashcard 14
Q: What are the Ten Core Principles of Economics (Mankiw, 2012)?
A:
1. People face tradeoffs.
2. The cost of something is what you give up to get it.
3. People respond to incentives.
4. Rational people think at the margin.
5. Trade can make everyone better off.
6. Markets are a good way to organize economic activity.
7. Governments can sometimes improve market outcomes.
8. A nation's standard of living depends on its ability to produce goods and services.
9. Prices rise when the government prints too much money.
10. Society faces a short-term tradeoff between inflation and unemployment.
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### Flashcard 15
Q: What is the role of entrepreneurship in economics?
A: Entrepreneurs organize and manage resources, taking on risks to produce goods or services, and are rewarded with profits.
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### Flashcard 16
Q: What is consumption in economics?
A: The acquisition and use of goods and services to fulfill needs (e.g., food, shelter) or wants.
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### Flashcard 17
Q: What are the two types of distribution in economics?
A:
- Physical Distribution: The transportation of goods from manufacturers to consumers.
- Functional Distribution: The distribution of wealth across different income groups.
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### Flashcard 18
Q: What is the tradeoff between inflation and unemployment?
A: In the short term, society faces a tradeoff between lowering unemployment and controlling inflation.
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### Flashcard 19
Q: What is productivity?
A: The efficiency with which resources are used to produce goods or services, often measured in terms of output or value added.
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These flashcards will cover the key concepts from your lecture notes. You can shuffle, practice, and review them regularly to strengthen your understanding of economics.