Unit 1: Basic Economic Concepts

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Physical capital

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32 Terms

1

Physical capital

________- Human- made equipment like machinery as well as buildings, roads, vehicles, and computers.

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2

entire curve

Changes in demand are when the ________ would shift upwards or downwards.

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3

Economic growth

________- The ability to produce a larger total output over time.

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4

price movement

Change in the quantity demanded only occurs due to change in ________ along the curve.

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5

Opportunity cost

________- The value of what was given up.

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6

Demand

________ is the entire line with all of the points that make it up.

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7

Command

________- Consists of the central planning of the economy which differed in different regions of the world depending on the political regime.

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8

inverse impact

The cost of production (land, labor, capital) has a(n) ________ on the supply.

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9

PPC curves

Realistically, ________ are not straight lines and tend to be concave- shaped.

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10

Macroeconomics

________: with ________, we consider the big picture- the nations economy as a whole.

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11

Entrepreneurial ability

________- The effort and know- how to put the other resources together in a productive venture.

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12

Consumer expectation

________ plays a major role in the determination of the price.

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13

Tradition

________- Tied to the evolution of economics, and it is related to subsistence and tribal life.

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14

Increase flexibility

________ by adapting quickly to changing circumstances and being open to new ideas.

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15

Shift

________ in supply is due to the determinants of supply.

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16

equilibrium price

When supply is constant and only demand increases, ________, and quantity increase.

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17

Microeconomics

microeconomics filters our scope to individuals in an economy while keeping the overall economy in mind

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18

Labor

Human effort and talent, physical and mental

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19

Land or natural resources

Any resource created by nature

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20

Physical capital

Human-made equipment like machinery as well as buildings, roads, vehicles, and computers

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21

Entrepreneurial ability

The effort and know-how to put the other resources together in a productive venture

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22

Tradition

Tied to the evolution of economics, and it is related to subsistence and tribal life

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23

Command

Consists of the central planning of the economy which differed in different regions of the world depending on the political regime

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24

Market

Essentially, it is the place in the economy where buyers and sellers perform transactions

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25

Opportunity cost

The value of what was given up

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26

Productive efficiency

When the economy is producing the maximum output for a given level of technology and resources

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27

Allocative efficiency

The economy is producing the optimal mix of goods and services

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28

Optimal

The combination of goods and services that provides the most net benefit to society

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29

Market failure

When a market fails to produce the allocative efficient quantity

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30

Economic growth

The ability to produce a larger total output over time

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31

Economic contraction

It is when a country's economy shrinks due to factors such as reduced spending by consumers, businesses, or the government

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32

Law of demand

Holding all else equal, when the price of good rises, consumers decrease the quantity demanded of that good

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