Economics - Summary
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Chapter 1
3 Main Questions - (correct Answer) - - What goods and services should be produced
- How should these goods and services be produced
- Who should get the goods and services that have been produced
How People make decisions - (correct Answer) - 1. People face trade offs (Zielkonflikt)
2. The cost of something is what you give up to get it (Opportunitätskosten)
3. Rational People think at the margin (vorausdenkend)
4. People respond to incentives (Anreize)
How people interact - (correct Answer) - 1. Trade can make everyone better off
2. Makets are usually a good way to organize economic activity
3. Governments can sometimes improve market outcomes
How the economy as a whole works - (correct Answer) - 1. A country's standard of living depends on it's
ability to produce goods and services
2. Prices rise when the government prints too much money
3. Society faces a short run trade off between inflation and unemployment
Important Words: - (correct Answer) - - resources
o Land: all natural resources oft he world
o Labour: human effort mental and physical that gose in to production
o Capital: the equipment and structures used to produce goods and services
- Scarcity: limited nature of societys resources (Knappheit)
, - Economics: study of how society manages ist scarce resources
- The economy: all the production and exchange activities that take place every day
- Economic activity: how much buying and selling goes on in the economiy over a period of time
- Equity: property of distribuiting economic prosperty fairly among the memebers of society
- Opportunity costs: whatever must be given up to obtain some itme (sacrifice)
- Marginal changes: small incermental adjustments to a plan of action (kleinen Änderung)
- Market economy: an economy that addresses the three key questions oft he economic problem
through allocation resources the decentralized decisions of manyfirms and households as they interact in
markets for goods and services
- Market failure: a situation where scarce resources are not allcoated to their most efficient use
- Externality: the cost of benefit of one person's decision on the well-being of a bystander (third party)
which the decision maker does not take into account in making the decision
- Market power: the ability of a single economic agent to have a substantioal influence on market prices
Important Words 2 - (correct Answer) - - Microeconomics: the study of how households and firms make
decisions and how they interact in markets
- Macroeconomis: the study of economy-wide phenomena, including inflation, unemployment and
economic growth
Save
Chapter 1
3 Main Questions - (correct Answer) - - What goods and services should be produced
- How should these goods and services be produced
- Who should get the goods and services that have been produced
How People make decisions - (correct Answer) - 1. People face trade offs (Zielkonflikt)
2. The cost of something is what you give up to get it (Opportunitätskosten)
3. Rational People think at the margin (vorausdenkend)
4. People respond to incentives (Anreize)
How people interact - (correct Answer) - 1. Trade can make everyone better off
2. Makets are usually a good way to organize economic activity
3. Governments can sometimes improve market outcomes
How the economy as a whole works - (correct Answer) - 1. A country's standard of living depends on it's
ability to produce goods and services
2. Prices rise when the government prints too much money
3. Society faces a short run trade off between inflation and unemployment
Important Words: - (correct Answer) - - resources
o Land: all natural resources oft he world
o Labour: human effort mental and physical that gose in to production
o Capital: the equipment and structures used to produce goods and services
- Scarcity: limited nature of societys resources (Knappheit)
, - Economics: study of how society manages ist scarce resources
- The economy: all the production and exchange activities that take place every day
- Economic activity: how much buying and selling goes on in the economiy over a period of time
- Equity: property of distribuiting economic prosperty fairly among the memebers of society
- Opportunity costs: whatever must be given up to obtain some itme (sacrifice)
- Marginal changes: small incermental adjustments to a plan of action (kleinen Änderung)
- Market economy: an economy that addresses the three key questions oft he economic problem
through allocation resources the decentralized decisions of manyfirms and households as they interact in
markets for goods and services
- Market failure: a situation where scarce resources are not allcoated to their most efficient use
- Externality: the cost of benefit of one person's decision on the well-being of a bystander (third party)
which the decision maker does not take into account in making the decision
- Market power: the ability of a single economic agent to have a substantioal influence on market prices
Important Words 2 - (correct Answer) - - Microeconomics: the study of how households and firms make
decisions and how they interact in markets
- Macroeconomis: the study of economy-wide phenomena, including inflation, unemployment and
economic growth
