Economics 3rd Ed Ch1

  1. What is Economics?
    The study of the choices that consumers, business managers, and governments officials make to attain their goals, given their scarce resources.
  2. What is Scarcity?
    Our wants are unlimited, but the resources to fulfill those wants are limited.
  3. In economics, the term marginal means?
    extra or additional
  4. What are trade-offs?
    Producing more of one good or service means producing less of another good or service.
  5. What is opportunity cost?
    The highest-valued alternative that must be given up to engage in that activity.
  6. What is a Centrally Planned Economy?
    Most economic dicisions are made by the government.
  7. What is a Market Economy?
    Most economic decisions are made by the consumers and firms.
  8. What is a mixed economy?
    Most decisions are made by consumers and firms, but the government plays a significant role.
  9. What is productive efficiency?
    Occurs when a good or service is produced that the lowest possible cost.
  10. What is Allocative Efficiency?
    When production is in accordance with consumer preference.
  11. What is Voluntary Exchange?
    A situation that occurs in markets when both the buyer and the seller of a product are made better off by the transaction.
  12. What is Equity?
    A fair distributuion of economic benefits.
  13. What are economic models?
    Simplified versions of reality used to analyze real-world economic situations. 
  14. What is Positive Analysis?
    A concern for what currently is.
  15. What is Normative Analysis?
    A concern with what ought to be.
  16. What are Microeconomics?
    The study of how households and firms make choices, how they interact with markets, and how the government attempts to influence their choices.
  17. What are macroeconomics?
    The study of the economy as a whole, including topics such as inflation, unemployment and economic growth.
Card Set
Economics 3rd Ed Ch1
UNIT 1 test Ch1-3