Econ
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34 terms
Terms | Definitions |
|---|---|
 economics | examines how individuals, institutions, and society make choices under conditions of scarcity |
| goods | tangible |
| services | intangible |
| 3 basic economic questions | what to produce? how to produce? for whom to produce? |
| utility | the pleasure, happiness, or satisfaction obtained from consuming a good or service |
| opportunity cost | the next best alternative foregone when an economic decision is made |
| rational decision making | the process of weighing up the opportunity cost and benefits of an activity |
| land | everything that grows on land or is found under it and everying in or under the sea |
| labor | physical and mental contribution of individuals |
| capital | all manufactored aids used in producing consumer goods/services satisfy our wants indirectly because they aid in the production of consumer goods |
| entrepreneurship | starting the business(raising capital) |
| command economy | the government answers all economic equations |
| free market economy | individuals answer all economic questions. all production is in private handsd and supply/demand set wages and prices in the economy. |
| transition economies | movement of countries from command to market |
| mixed economies | every country is mixed. different combinations. part command, part market |
| ceteris paribus | holding all but one of the variables constant "all things being equal" |
| positive | facts/ cause-and-effect relationships "what is" deals w/ areas that are capable of being proven to be correct or not. Deals w/ what the economy is actually like |
| normative | judgements/opinions "what ought to be" looks at the desirability of certain aspects of the economy. deals w/ areas that are open to personal opinion and belief |
| ppc | graphical representation of 2 goods that can be produced if an economy, firm, etc. uses its resources fully and efficiently |
| economic growth | the increase in real national income per capita (movement inside ppc closer towards the curve) |
| economic development | a measure of welfare, a measure of how wonderful life is |
| sustainable development | development that meets the needs of the present without compromising the ability of future generations to meet their own needs |
| scarcity | The situation in which unlimited wants exceed the limited resources available to fulfill those wants. |
| what does scarcity do? | restricts options and demands choices |
| rent | payment for land |
| wages | payment for labor |
| interest | payment for capital |
| profit | payment for entrepreneurship |
| china textiles | example command economy |
| real | having allowed effects of inflation |
| national income | value of all goods and services produced in an economy during a time period |
| per capita | per head/population |
| welfare of people | what does the ppc not tell you? |
| land, labor, entrepreneurship, capital | factors of production |
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