MCC ECON 201 Economics I (Macro) - Chapter 1

24 flashcards · Economics · by luckydog789 (harrison holbrook)

1. Circular flow diagram

   A diagram that views the economy as consisting of households and firms interacting in a goods and services market and a labor market

2. Command economy

   An economy where economic decisions are passed down from government authority and where the government owns the resources

3. Division of labor

   The way in which different workers divide required tasks to produce a good or service

4. Economics

   The study of how humans make choices under conditions of scarcity

5. Economies of scale

   When the average cost of producing each individual unit declines as total output increases

6. Exports

   Products (goods and services) made domestically and sold abroad

7. Fiscal policy

   Economic policies that involve government spending and taxes

8. Globalization

   The trend in which buying and selling in markets have increasingly crossed national borders

9. Goods and services market

   A market in which firms are sellers of what they product and households are buyers

10. Gross domestic product (GDP)

    Measure of the size of total production in an economy, the value of all finished products (products that aren't part of another product) produced

11. Imports

    Products (goods and services) made abroad and then sold domestically

12. labor market

    The market in which households sell their labor as workers to business firms or other employers in exchange for wages and benefits

13. Macroeconomics

    The branch of economics that focuses on broad issues such as growth, unemployment, inflation, and trade balance

14. Market

    Interaction between potential buyers and sellers; a combination of demand and supply

15. Market economy

    An economy where economic decisions are decentralized, private individuals own resources, and businesses supply goods and services based on demand

16. Microeconomics

    The branch of economics that focuses on actions of particular agents within the economy, like households, workers, and business firms

17. Model

    A theory

18. Monetary policy

    Policy that involves altering the level of interest rates, the availability of credit in the economy, and the extent of borrowing

19. Private enterprise

    System where private individuals or groups of private individuals own and operate the means of production (resources and businesses)

20. Scarcity

    When human wants for goods and services (which is virtually unlimited) exceeds the available supply

21. Specialization

    When workers or firms focus on particular tasks for which they are well-suited within the overall production process

22. Theory

    A representation of an object or situation that is simplified while including enough of the key features to help us understand the object or situation

23. Traditional economy

    Typically an agricultural economy where things are done the same as they have always been done

24. Underground economy

    A market where buyers and sellers make transactions in violation of one or more government regulations, commonly referred to as "black markets", common in command economies