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- Southern Methodist University
- Economics
- Economics 1312
- Saliba
- Econ Review Ch 1-4
Econ Review Ch 1-4
Economics 1312 with Saliba at Southern Methodist University
About this deck
By: Aaron Holmblad
Created: 2011-12-12
Size: 47 flashcards
Views: 2
Created: 2011-12-12
Size: 47 flashcards
Views: 2
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scarcity
means that society has limited resources and therefore cannot produce all the goods and services people wish to have
economics
the study of how society manages its scarce resources.
efficiency
when a society is getting the maximum benefits from its scarce resources
equality
the property of distributing economic prosperity uniformly among the members of society
opportunity cost
whatever must be given up to obtain some item
rational people
people who systematically and purposefully do the best they can to achieve their objectives
marginal changes
small incremental adjustments to a plan of action
incentive
something that induces a person to act
market economy
an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.
property rights
the ability of an individual to own and exercise control over scarce resources
market failure
a situation in which a market left on its own fails to allocate resources efficiently
externality
the impact of one person's actions on the well-being of a bystander
market power
the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices
productivity
the quantity of goods and services produced from each unit of labor input
inflation
an increase in the overall level of prices in the economy
business cycle
fluctuations in economic activity, such as employment and production
circular-flow diagram
a visual model of the economy that shows how dollars flow through markets among households and firms
production possibilites frontier
a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology
microeconomics
the study of how households and firms make decisions and how they interact in markets
macroeconomics
the study of economy-wide phenomena, including inflation, unemployment, and economic growth.
positive statements
claims that attempt to describe the world as it is
normative statements
claims that attempt to prescribe how the world should be
absolute advantage
the ability to produce a good using fewer inputs than another producer
opportunity cost
whatever must be given up to obtain some item
comparative advantage
the ability to produce a good at a lower opportunity cost than another producer
imports
goods produced abroad and sold domestically
exports
goods produced domestically and sold abroad
market
a group of buyers and sellers of a particular good or service
competitive market
a market in which there are many buyers and many sellers so that each has a negligible impact on the market price
quantity demanded
the amount of a good that buyers are willing and able to purchase
law of demand
the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises.
demand schedule
a table that show the relationship between the price of a good and the quantity demanded
demand curve
a graph of the relationship between the price of a good and the quantity demanded
normal good
a good for which, other things equal, an increase in income leads to an increase in demand
inferior good
a good for which, other things equal, an increase in income leads to a decrease in demand
substitutes
two goods for which an increase in the price of one leads to a decrease in the demand for the other
complements
two goods for which an increase in the price of one leads to a decrease in the demand for the other
quantity supplied
the amount of a good that sellers are willing and able to sell
law of supply
the claim that, other things equal, the quantity supllied of a good rises when the price o the good rises
supply schedule
a table that shows the relationship between the price of a good and the quantity supplied
supply curve
a graph of the relationship between the price of a good and the quantity supplied
equilibrium
a situation in which the market price has reached the level at which the quantity supplied equals the quantity demanded
equilibrium price
the price that balances quantity supplied and quantity demanded
equilibrium quantity
the quantity supplied and the quantity demanded at the equilibrium price
surplus
a situation in which quantity supplied is greater than quantity demanded
shortage
a situation in which quantity demanded is greater than quantity supplied
law of supply and demand
the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance
About this deck
By: Aaron Holmblad
Created: 2011-12-12
Size: 47 flashcards
Views: 2
Created: 2011-12-12
Size: 47 flashcards
Views: 2
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
Naj