Economics Study Guide Flashcards

Front

What is economics?

Back

The study of how people choose to use resources.

Front

What is scarcity? Please give an example.

Back

Scarcity refers to the limited nature of society's resources. Example: Water in a drought.

Front

Differentiate between need and want.

Back

Needs are essential for survival (food, shelter), while wants are desires for non-essential items.

Front

What are the four factors of production? Be able to define each and give an example.

Back

1. Land: natural resources (e.g., minerals). 2. Labor: human effort (e.g., workers). 3. Capital: tools and machinery (e.g., factories). 4. Entrepreneurship: the ability to combine resources to create goods.

Front

What is the paradox of value? Be able to give an example.

Back

The paradox of value refers to the situation where some necessities have a low monetary value, while non-essentials have a high value. Example: Water vs. diamonds.

Front

What is wealth? Be able to identify the four elements of it.

Back

Wealth is the accumulation of valuable resources or goods. Four elements: property, money, stocks, and bonds.

Front

What does TINSTAAFL stand for?

Back

There Is No Such Thing As A Free Lunch.

Front

What are three questions that all societies must decide?

Back

1. What to produce? 2. How to produce? 3. For whom to produce?

Front

What is GDP?

Back

Gross Domestic Product, the total value of all goods and services produced in a country.

Front

What is the production possibilities curve? Know how to read the diagram and what each point means.

Back

A graph that shows the maximum feasible amount of two goods that a country can produce with available resources.