Economic Study Guide

Economic Study Guide

Key Terms:

1.Economics- the branch of knowledge concerned with the production, consumption,+ transfer of wealth.

2.Microeconomics-The part of economics concerned with single factors and the effects of individual decisions.

3. Macroeconomics-The part of economics concerned with large scale or general factors.

4.Scarcity-Fundamental economic problem of having seemingly unlimited human needs and wants, in a world of limited sources.

5.Choice-Ability of a consumer to pick between things.

6.Opportunity Cost-The benefit that is lost in making.

7.Trade-Offs-Giving up something you want for something else you want.

8.Factors of Production-Anything used in the production of a good or service. They are classified into land, labor,capital, physical capital, and human capital.

9.Marginal Thinking-Considering how much you value an addition of something.

10.Production Possibilities curve-Economy is not using its resources efficiently to produce the maximum amount of goods.

11.Production Possibilities Frontier-A graph showing all possible options of output for two products.

​Continued Key Terms...

12.Economic Systems- A system of production, resource allocation,+ distribution of goods+services.

13.Basic economic questions- What goods and services to produce? How to produce? For whom to produce?

14.Market economy- Economic questions answered by individuals.

15.Public goods and services-A community or service that is made available to all members of a society.

16.Circular flow diagram-A model of the economy in which the mower exchanges are represented as flows of the money, goods,+services.

17.Product Market- Firms supply households with goods and services i exchange for money.

18.Factor market-Households supply factors of production and consumer goods+services.

19.Households-Own the factors of production and consumer goods+services.

20.Firms-Use factors of productions to product and produce.