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the limited nature of society's resources
answer
scarcity
question
the study of how society manages its scarce resources
answer
economics
question
Efficiency vs. equality is seen as a what? Give an example and explain it.
answer
It is seen as a common trade-off. According to our society, you cannot have both exist equally. It is either one of the other, for example, it is like a pie. Efficiency is the size of the economic pie and equality refers to how the pie is divided. When the government tries to cut the pie into equal slices, the pie gets smaller. In better terms, when the government tries to take from the rich and give to the poor, it only reduces the efficiency, meaning that people do not have the motivation to work as hard meaning less goods and services are produced and the economy in turn suffers.
question
whatever must be given up to obtain some item
answer
opportunity cost
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people who systematically and purposefully do the best they can to achieve their objectives
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rational people
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a small incremental adjustment to a plan of action
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marginal change
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When exams roll around, your decision is not between blowing them off and studying twenty four hours a day but whether to spend an extra hour reviewing your notes instead of watching TV
This is an example of what?
This is an example of what?
answer
marginal change
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giving up formal college education to play for the NFl is an example of what?
answer
opportunity cost
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Rational people often make decisions by comparing what?
answer
marginal benefits and marginal costs
question
something that induces a person to act
answer
incentive
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issuing a seat belt law to reduce the amount of deaths or serious injuries in accidents is an example of a what?
answer
incentive
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What does trade allow?
answer
It allow's each person to specialize in what they do best and enjoy a greater variety of goods and services
question
an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services
answer
market economy
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True or False, in a market economy there is a central planner
answer
False
question
A musical artist will not continue to sell their music on itunes if peope continue to download it illegally
This is an example of what?
This is an example of what?
answer
property rights
question
the ability of an individual to own and exercise control over scarce resources
answer
Property rights
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What does the invisible hand use to direct economic activity?
answer
prices
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Why is the government needed in decisions regarding the economy?
answer
the need of an institution( gov.) to enforce property rights
to avoid market failure and externality
to avoid market failure and externality
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a situation in which a market left on its own fails to allocate resources efficiently
answer
market failure
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the impact of one person's actions on the well-being of a bystander
answer
externality
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when the production of a good pollutes the air and creates health problems for those who live near factories
This is an example of what?
This is an example of what?
answer
externality
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What is the cause of market failure?
answer
externality
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the amount of goods and service produced by each unit of labor input
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productivity
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What is the cause of large or persistent inflation?
answer
the quantity of money
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fluctuations in economic activity, such as employment and production
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Business cycle
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increases in the overall level of prices in the economy
answer
inflation
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a daily newspaper in Germany cost 0.30 marks, less than two years later, that same newspaper costs 70,000,000 marks.
This is an example of what?
This is an example of what?
answer
inflation
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individual decision makers
answer
microeconomics
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What is an example of microeconomics?
answer
firms and consumers
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Individual face trade offs
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- everything we do has a cost
-sacrificing
- There aint no such thing as a free lunch
-wants
-sacrificing
- There aint no such thing as a free lunch
-wants
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The cost of something is what you give up to get it
answer
-nothing is free
-opportunity cost
-opportunity cost
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What is Rationality?
answer
people make decisions for good reasons
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What is Margin thinking?
answer
extra or additional thinking,
incremental changes or comaparing Marginal benefits to marginal costs
incremental changes or comaparing Marginal benefits to marginal costs
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What is the greatest incentive in life?
answer
property, the power of ownership
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What does trade increase?
answer
increases the welfare of life
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What is a social science?
answer
economics
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What is the main difference between economists and physicists( true science)?
answer
Economists have to make do with whatever data the world happens to give them
question
To find a substitute for laboratory experiments, what does economists have to pay close attention to ?
answer
to the natural experiments offered by history
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what can assumptions do for economists?
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It can simplify the complex world and make it easier to understand
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What does economics use to learn about the world?
answer
models
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What does an economic model consist of?
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diagrams and equations
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a visual model of the economy that shows how dollars flow through markets among households and firms
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circular flow diagram
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who are the buyers and sellers in the circular flow?
answer
Households are the sellers and firms are the buyers
question
Explain a Production possibilities frontier
answer
a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the variable production technology
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True or False
Resources are scarce
Resources are scarce
answer
True
question
True or False
The economy can produce outside of the production possibilities frontier
The economy can produce outside of the production possibilities frontier
answer
False
question
When an outcome is said to be efficient, what does that entail?
answer
The economy is getting all it can from the scarce resources that it has available
question
The production possibilities frontier shows what?
answer
the opportunity cost of one good as measured in terms of the other good
the trade off between the outputs of different goods at a given time, but the trade off can change over time
the trade off between the outputs of different goods at a given time, but the trade off can change over time
question
is the study of how households and firms make decisions and how they interact in markets
answer
microeconomics
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is the study of economy wide phenomena, including inflation, unemployment, and economics growth
answer
macroeconomics
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study the effects of rent control on the US auto housing n New York City
This is an example of what profession
This is an example of what profession
answer
microeconomist
question
Study the effects of borrowing by the federal government, the change over time int he economy's rate of unemployment or alternative policies to promote growth in national living standards
answer
macroeconomist
question
She is making a claim about how the world works
This is an example of what?
This is an example of what?
answer
Polly
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He is making a claim about how he would like to change the world.
This is an example of what?
This is an example of what?
answer
Norm
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claims that attempt to describe the world as it is
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positive statements
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claims that attempt to prescribe how the world should be
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normative statements
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What is the main difference between polly and normative statements?
answer
Polly is descriptive, while normative is prescriptive
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Normative statements can be judged by data alone
True or False
True or False
answer
False
question
True or False
An economist who says that all policy decisions are easy or clear-cut is an economist not to be trusted
An economist who says that all policy decisions are easy or clear-cut is an economist not to be trusted
answer
True
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