Flashcards on Introduction to Economics

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What is economics?

Economics is the study of how individuals and societies allocate limited resources to satisfy their unlimited wants and needs.

What are the basic economic questions?

The basic economic questions are: what to produce, how to produce, and for whom to produce.

What is the difference between microeconomics and macroeconomics?

Microeconomics focuses on individual economic units and their behavior, while macroeconomics studies the economy as a whole.

What is the law of supply and demand?

The law of supply states that as the price of a good or service increases, the quantity supplied also increases, and vice versa. The law of demand states that as the price of a good or service increases, the quantity demanded decreases, and vice versa.

What is opportunity cost?

Opportunity cost is the value of the next best alternative that is forgone when a choice is made.

What are the factors of production?

The factors of production are land, labor, capital, and entrepreneurship.

What is GDP?

Gross Domestic Product (GDP) is the total value of all final goods and services produced within a country in a given period of time.

What is inflation?

Inflation is the sustained increase in the general level of prices of goods and services in an economy over a period of time.

What is a market economy?

A market economy is an economic system in which decisions regarding production, distribution, and consumption are based on supply and demand, and prices of goods and services are determined in a free price system.

What is scarcity?

Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

What is a mixed economy?

A mixed economy is an economic system that incorporates elements of both a market economy and a planned economy.

What is fiscal policy?

Fiscal policy refers to the use of government spending and taxation to influence the economy.

What is monetary policy?

Monetary policy refers to the actions taken by a central bank to manage and control the money supply to achieve macroeconomic goals.

What is the law of diminishing marginal utility?

The law of diminishing marginal utility states that as a person consumes more units of a good or service, the additional satisfaction or utility derived from each additional unit will eventually decrease.

What is comparative advantage?

Comparative advantage is the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than others.

What is specialization?

Specialization is the process of concentrating on and becoming expert in a particular subject or skill.

What is economics?

Economics is the study of how individuals and societies allocate limited resources to satisfy their unlimited wants and needs.

What are the basic economic questions?

The basic economic questions are: what to produce, how to produce, and for whom to produce.

What is the difference between microeconomics and macroeconomics?

Microeconomics focuses on individual economic units and their behavior, while macroeconomics studies the economy as a whole.

What is the law of supply and demand?

The law of supply states that as the price of a good or service increases, the quantity supplied also increases, and vice versa. The law of demand states that as the price of a good or service increases, the quantity demanded decreases, and vice versa.

What is opportunity cost?

Opportunity cost is the value of the next best alternative that is forgone when a choice is made.

What are the factors of production?

The factors of production are land, labor, capital, and entrepreneurship.

What is GDP?

Gross Domestic Product (GDP) is the total value of all final goods and services produced within a country in a given period of time.

What is inflation?

Inflation is the sustained increase in the general level of prices of goods and services in an economy over a period of time.

What is a market economy?

A market economy is an economic system in which decisions regarding production, distribution, and consumption are based on supply and demand, and prices of goods and services are determined in a free price system.

What is scarcity?

Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

What is a mixed economy?

A mixed economy is an economic system that incorporates elements of both a market economy and a planned economy.

What is fiscal policy?

Fiscal policy refers to the use of government spending and taxation to influence the economy.

What is monetary policy?

Monetary policy refers to the actions taken by a central bank to manage and control the money supply to achieve macroeconomic goals.

What is the law of diminishing marginal utility?

The law of diminishing marginal utility states that as a person consumes more units of a good or service, the additional satisfaction or utility derived from each additional unit will eventually decrease.

What is comparative advantage?

Comparative advantage is the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than others.

What is specialization?

Specialization is the process of concentrating on and becoming expert in a particular subject or skill.

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