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Econ 1000 exam 1 | ECON 1000 - Introduction To The American Economy, Quizzes of Economics

Class: ECON 1000 - Introduction To The American Economy; Subject: Economics; University: University of Missouri-St Louis; Term: Fall 2011;

Typology: Quizzes

2011/2012

Uploaded on 02/15/2012

zoeysparrow
zoeysparrow 🇺🇸

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TERM 1
Economics
DEFINITION 1
the study of scarcitythe study of choices or decision making
TERM 2
Resources of Production (4)
DEFINITION 2
LandLaborCapitolEntrepreneurship
TERM 3
Factor payments
DEFINITION 3
Land earns rentlabor earns wagescapitol earns
interestentrepreneurship earns profit
TERM 4
Adam Smith
DEFINITION 4
"The First Economist""Invisible Hand"Wrote "The Wealth of
Nations"
TERM 5
Scarcity
DEFINITION 5
Scarcity is the fundamental economic problem of having
humans who have wants and needs in a world of limited
resources.
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Economics

the study of scarcitythe study of choices or decision making TERM 2

Resources of Production (4)

DEFINITION 2 LandLaborCapitolEntrepreneurship TERM 3

Factor payments

DEFINITION 3 Land earns rentlabor earns wagescapitol earns interestentrepreneurship earns profit TERM 4

Adam Smith

DEFINITION 4 "The First Economist""Invisible Hand"Wrote "The Wealth of Nations" TERM 5

Scarcity

DEFINITION 5 Scarcity is the fundamental economic problem of having humans who have wants and needs in a world of limited resources.

Decision making

  1. choose decision to maximize gain2. choose decision to minimize loss TERM 7

SHORTAGE V. SCARCITY

DEFINITION 7 shortage-- temporary, sellers in marketplaceV.Scarcity- constant, can never be solved TERM 8

POVERTY

DEFINITION 8 avoidable, could be solvedgoverning body chooses not to address basic human needs TERM 9

Pure Market Economy

DEFINITION 9 Capitalism / Free enterprise- private property ownership- Democracy TERM 10

Pure Command/ Planned Economy

DEFINITION 10 one individual makes all the decisions in response to what to produce, how to produce, and for whom do these products go toCommunism, Socialism, Tyranny, Dictatorship

Positive Approach

examination and understanding of definitions, facts, theories, relationships and ability to apply concepts-black and white- objective"What is it?" TERM 17

Normative Approach

DEFINITION 17 opinions values judgementssubjective"What ought it to be?" TERM 18

Vertical line

DEFINITION 18 slope is infinity TERM 19

Horizontal line

DEFINITION 19 slope is 0 TERM 20

Negative Relationship between X and Y

DEFINITION 20 negative, decreasing, indirect, inverseline with downward slope to the right

Positive Relationship between X and Y

positive, increasing, direct TERM 22

Opportunity Cost

DEFINITION 22 Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative foregone. Measurement of what is given up TERM 23

PPC

DEFINITION 23 Production Possibilties Curve- max combination of g/s that can be produced in an economy in a given period of time TERM 24

2 underlying assumptions to achieve

maximum production

DEFINITION 24

  1. all available resources are being used2. highest level of technology available must also be used TERM 25

Linear

PPC

DEFINITION 25 constant tradeoff/ opportunity costeach product is the other's o/c1 acre would have to have same PPC as another 1 acre of land- make it almost impossible--NOT the real world

Changes in Resources

Resources increase = PPC increase (shift right)Resources decrease = PPC decrease (shift left) - natural disasters, man made disasters, human disease TERM 32

Change in Technology

DEFINITION 32 Technology increase = PPC increase (shift right) Technolgy decrease = PPC decrease (shift left) TERM 33

"Law of Increasing Cost"

DEFINITION 33 "once all factors of production are at maximum output and efficiency, producing more will cost more than average." TERM 34

"Law of Diminishing Returns"

DEFINITION 34 In economics, diminishing returns is the decrease in the marginal (per-unit) output of a production process as the amount of a single factor of production is increased, while the amounts of all other factors of production stay constant. TERM 35

2 types of Resources in Production

DEFINITION 35

  1. Fixed -- finite in quantity2. Variable -- LABOR

Trade in Production

PPC --> Specializing in production --> Trade --> Gains from Trade TERM 37

Absolute Advantage

DEFINITION 37 A trading party is said to have AA in the production of a product if it can produce the product a. in a larger amount using the SAME set of RESOURCES b. with less or fewer RESOURCES used TERM 38

Comparative Advantage

DEFINITION 38 A trading party is said to have CA in the production of a product if it can produce the product with lower OPPORTUNITY COST TERM 39

Fallacy of False Cause

DEFINITION 39 Post hoc ergo propter hoccause does not equal effect TERM 40

Fallacy of Cavalier Comparison

DEFINITION 40 you must compare things that have a common baseyou cannot compare apples to oranges

Determinants of Supply (4)

p(x) PRICE Number of Sellers Costs of Production Technology TERM 47

Equilibrium

DEFINITION 47 Equilibrium is the condition of a system in which competing influences are balanced. where the Demand intersects Supply TERM 48

Price changes

DEFINITION 48 point to point changes on a curve cause change in Quantity Demanded of Product TERM 49

Shift Parameters

DEFINITION 49 cause changes in DEMAND for a product TERM 50

"Law of Supply"

DEFINITION 50 The Law of Supply states that at higher prices, producers are willing to offer more products for sale than at lower prices,

market supply

horizontal summation of all individual sellers quantity supplied at each and every price TERM 52

Supply

DEFINITION 52 quantity that sellers are willing and able to produce at each and every price P --> Q(s) TERM 53

Surplus

DEFINITION 53 when quantity supplied is greater than quantity demanded- sellers react by lowering prices and lowering quantity supplied- buyers react to lowered prices by increasing Quantity demanded TERM 54

Shortage

DEFINITION 54 unwanted and unplanned event- sellers increase prices and increase Q(s)- buyers will react to higher prices by lowering Quantity Demanded TERM 55

Demand v Quantity

Demand

DEFINITION 55 Demand - entire relationship between prices and quantity of this product--- "The Demand Curve"Quantity Demanded- refers to one particular point on the demand curve --- How much of the product is demanded at each particular price