Econ Week 3 Module 2 and 3 Study Guide
Econ Week 3 Module 2 and 3 Study Guide Eco 2301
Popular in Principles of Economics
Popular in Principles of Economics
This 20 page Study Guide was uploaded by Naomi Davis on Thursday September 15, 2016. The Study Guide belongs to Eco 2301 at Texas State University taught by Bishop in Fall 2016. Since its upload, it has received 9 views. For similar materials see Principles of Economics in Principles of Economics at Texas State University.
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Date Created: 09/15/16
ECO 2301--SURVEY OF ECONOMICS: CHAPTER 1 KEY TERMS & DEFINITIONS CAPITAL (__4____) the equipment and structures used to produce goods and services ECONOMICS (___4___) the study of choices we make among our many wants and desires given our limited resources HUMAN CAPITAL (___4___) the productive knowledge and skill people receive from education, on–the–job training, health, and other factors that increase productivity LABOR (___4___) the physical and human effort used in the production of goods and services LAND (__4____) the natural resources used in the production of goods and services RESOURCES (___4___) inputs used to produce goods and services SCARCITY (__4____) exists when human wants (material and nonmaterial) exceed available resources THE ECONOMIC PROBLEM (__4____) scarcity forces us to choose, and choices are costly because we must give up other opportunities that we value ECONOMIC GOODS (__5____) scarce goods created from scarce resources—goods that are desirable but limited in supply ENTREPRENEURSHIP (__4____) the process of combining labor, land, and capital to produce goods and services GOODS (__5____) items we value or desire INTANGIBLE GOODS (__5____) goods that we cannot reach out and touch, such as friendship and knowledge SERVICES (__5____) intangible items of value provided to consumers, such as education TANGIBLE GOODS (____5__) items we value or desire that we can reach out and touch BADS (__5____) items that we do not desire or want, where less is preferred to more, such as terrorism, smog, or poison oak RATIONAL BEHAVIOR (__7____) people do the best they can, based on their values and information, under current and anticipated future circumstances MARKET (__8____) the process of buyers and sellers exchanging goods and services EFFICIENCY (__9____) when an economy gets the most out of its scarce resources MARKET FAILURE (__10____) when the economy fails to allocate resources efficiently on its own FACTOR (OR INPUT) MARKETS (__11____) markets in which households sell the use of their inputs (capital, land, labor, and entrepreneurship) to firms PRODUCT MARKETS (__11____) markets in which households are buyers and firms are sellers of goods and services SIMPLE CIRCULAR FLOW MODEL (___12___) an illustration of the continuous flow of goods, services, inputs, and payments between firms and households HYPOTHESIS (___13___) a testable proposition THEORY (__13____) a statement or proposition used to explain and predict behavior in the real world CETERIS PARIBUS (__14____) holding all other things constant EMPIRICAL ANALYSIS (__14____) the use of data to test a hypothesis MICROECONOMICS (__15____) the study of household and firm behavior and how they interact in the marketplace AGGREGATE (__16____) the total amount—such as the aggregate level of output CAUSATION (_16_____) when one event brings about another event CORRELATION (__16____) when two events occur together MACROECONOMICS (___15___) the study of the whole economy, including the topics of inflation, unemployment, and economic growth FALLACY OF COMPOSITION (__17____) the incorrect view that what is true for the individual is always true for the group POSITIVE STATEMENT (___17___) an objective, testable statement that describes what happens and why it happens NORMATIVE STATEMENT (__17____) a subjective, contestable statement that attempts to describe what should be done ECONOMICS 2301 CHAPTER 2 KEY TERMS & DEFINITIONS CAPITAL INTENSIVE: ( 43 ) production that uses a large amount of capital COMMAND ECONOMY: ( 42 ) economy in which the government uses central planning to coordinate most economic activities COMPARATIVE ADVANTAGE: ( 35 ) occurs when a person or country can produce a good or service at a lower opportunity cost than others CONSUMER SOVEREIGNTY: ( 42 ) consumers vote with their dollars in a market economy; this accounts for what is produced INCREASING OPPORTUNITY COST: ( 38 ) the opportunity cost of producing additional units of a good rises as society produces more of that good LABOR INTENSIVE: ( 43 ) production that uses a large amount of labor MARGINAL THINKING: ( 33 ) focusing on the additional, or marginal, choices; marginal choices involve the effects of adding or subtracting, from the current situation, the small (or large) incremental changes to a plan of action MARKET ECONOMY: ( 42 ) an economy that allocates goods and services through the private decisions of consumers, input suppliers, and firms MIXED ECONOMY: ( 42 ) an economy in which government and the private sector determine the allocation of resources NET BENEFIT: ( 34 ) the difference between the expected marginal benefits and the expected marginal costs OPPORTUNITY COST: ( 31 ) the value of the best forgone alternative that was not chosen PRODUCTION POSSIBILITIES CURVE: ( 37 ) the potential total output combinations of any two goods for an economy RULE OF RATIONAL CHOICE: ( 33 ) individuals will pursue an activity if the expected marginal benefits are greater than the expected marginal costs SPECIALIZING: ( 35 ) concentrating on the production of one or a few goods Module 2 and 3 Study Guide! Hey ya’ll! Below I have listed all of the adjectives, filled in all the page numbers on the key terms, and uploaded my notes (with the exception of the very last section on ethics because I haven’t taken that quiz or the completion quiz yet) for Module 3. To study, TAKE THE REVIEW QUIZZES! https://tracs.txstate.edu/portal/site/7d024cab-8c18-403c- bef5-2b4b82fc14e2/page/dfccfca6-5d14-4759-9157-e06d1d2b56d5 Also, make sure you know these objectives, key terms, and review the notes! I didn’t upload links to the section videos or powerpoints because they are all found on Tracs. MODULE 2: THE ROLE AND METHOD OF ECONOMICS Economics: A Brief Introduction Chapter 1, Section 1: Economics: A Brief Introduction What is economics? What is scarcity? What are goods and services? What are the types of resources? Objectives: Match the 15 Key Economics Terms introduced in Chapter 1, Section 1 of the textbook to their definitions. Given examples of economic terms, classify them as one of the 15 Key Economic terms introduced in Chapter 1, Section 1 of the textbook. Determine why scarcity can never be eradicated. Determine the difference between goods and services. Determine the difference between tangible and intangible goods. Given examples of specific resources, differentiate between labor, land, capital, and entrepreneurship. MODULE 2: THE ROLE AND METHOD OF ECONOMICS Economic Behavior and Markets Chapter 1, Section 2: Economic Behavior How is self-interest relevant to economics? What is rational behavior? Can we predict how people will respond to changes in incentives? Chapter 1, Section 3: Markets How does a market economy allocate scarce resources? What is a market failure? What are product and factor markets? 10. What is the circular flow model? Objectives Match the Key Economics Term introduced in Chapter 1, Section 2 of the textbook to its definition. Determine whether a particular example of behavior is rational. Determine how a particular incentive in an example could affect someone’s behavior. Match the 6 Key Economics Terms introduced in Chapter 1, Section 3 of the textbook to their definitions. Given examples of at least three markets, determine how each allocates particular resources. Given examples of resource allocation, determine where free (for-profit) markets are unlikely to succeed. Differentiate between Product Markets and Factor Markets. Given examples of markets activities, determine which depict examples of market failures Chapter 1, Section 4: Economic Theory What are economic theories? Why do we need to abstract? What is a hypothesis? What are microeconomics and macroeconomics? Chapter 1, Section 5: Pitfalls to Avoid in Scientific Thinking 1. If two events usually occur together, does it mean one event caused the other to happen? 2. What is the fallacy of composition? Chapter 1, Section 6: Positive and Normative Markets 3. What is a positive statement? 4. What is a normative statement? 5. Why do economists disagree? Chapter 1, Section 7: Why Study Economics? Economics is all around us. Objectives Match the 7 Key Economics Terms introduced in Chapter 1, Section 4 of the textbook to their definitions. Given an example of a specific area of economic activity, determine whether it would be considered Macro-economic or Micro-economic. Differentiate between a theory and a hypothesis. Differentiate between examples of abstraction with or without the ceteris paribus assumption. Match the 3 Key Economics Terms introduced in Chapter 1, Section 5 of the textbook to their definitions. Given an example of a specific relationship, determine whether it is an example of causation or correlation. Given examples of an aggregation, determine whether it is an example of the fallacy of composition. Match the 2 Key Economics Terms introduced in Chapter 1, Section 6 of the textbook to their definitions. Given an example, determine whether a specific economic statement is Normative or Positive. MODULE 3: THE ECONOMIC WAY OF THINKING & MARKET ETHICS Choices, Costs, and Marginal Thinking Section 1: Choices, Costs, and Trade-Offs What do we give up when we have to choose? Why are “free” lunches not free? Section 2: Marginal Thinking 1. What do we mean by marginal thinking? 2. What is the rule of rational choice? 3. Why do we use the word “expected” with marginal benefits and costs? Objectives 4. Match the Key Economics Term introduced in Chapter 2, Section 1 of the textbook to its definition. 5. Determine which actions must be taken under specific conditions of scarcity. 6. Given a specific choice made under conditions of scarcity, determine the opportunity cost. 7. Determine how specific opportunity costs could affect choices made under conditions of scarcity. 8. Differentiate between monetary and non-monetary costs. Match the 3 Key Economics Terms introduced in Chapter 2, Section 2 of the textbook to their definitions. 10. Given sets of consumption choices, determine the marginal cost and the marginal benefit. 11. Given the marginal costs and marginal benefits of possible choices, determine which choice is rational. 12. Given examples of marginal costs and marginal benefits, determine the optimum levels of an economic activity. 13. Given examples of marginal costs and marginal benefits, determine the net benefit. MODULE 3: THE ECONOMIC WAY OF THINKING & MARKET ETHICS Specialization, Trade and Economic Systems Section 3: Specialization and Trade What is the relationship between opportunity cost and specialization? What are the advantages of specialization in production? Section 4: The Production Possibilities of an Economy 1. What is a production possibilities curve? 2. What is efficiency? 3. What is the law of increasing opportunity costs? 4. How do we show economic growth? Section 5: Economic Systems 5. What goods and services will be produced? 6. How will the goods and services be produced? 7. Who will get the goods and services? Objectives Match the 2 Key Economics Terms introduced in Chapter 2, Section 3 of the textbook to their definitions. Given specific capabilities of different people or firms, determine which person or firm would perform particular actions. Given examples of economic benefits, determine which are benefits of specialization. Given examples of economic changes, determine which might be caused by specialization. Match the 2 Key Economics Terms introduced in Chapter 2, Section 4 of the textbook to their definitions. Given examples of specific technological and resource limitations, identify the boundaries of the production possibilities curve for two specific goods. Given an example of a specific production possibilities curve, determine whether a given point is efficient, inefficient, or not attainable. Given a specific production possibilities curve, identify the changes in opportunity cost which result from the Law of Increasing Opportunity Cost. Given examples of specific goods, determine whether they are capital goods or consumer goods. Given a specific production possibilities curve and a specific technological change, determine the effect on the production possibilities curve. Given examples of changes in resource allocation, determine the effect on the production possibilities curve. Given a production possibilities curve, determine why it might be bowed out from the origin rather than a straight line. Match the 6 Key Economics Terms introduced in Chapter 2, Section 5 of the textbook to their definitions. Identify the basic three questions that must be answered by any economic system, and how they are answered by command economies, market economies and mixed economies. Given examples of a production process, determine whether is labor intensive or capital intensive. Given the name of a particular economic system, determine how specific economic decisions might be made. Identify advantages and disadvantages of command, market and mixed economies. MODULE 3: THE ECONOMIC WAY OF THINKING & MARKET ETHICS Ethics: The Golden Rules Section 1: Ethics: The Golden Rules Objectives Match the 6 Market Ethics Key Terms introduced in the Section 1: Ethics: The Golden Rules text material on TRACS to their definitions. Given specific ethical situations, determine whether a new regulation or punishment is warranted. Given specific market situations, determine the effects of specific ethical violations. MODULE 3: THE ECONOMIC WAY OF THINKING & MARKET ETHICS The Cheating Game, Corruption & Correction Section 2: The Cheating Game, Corruption & Correction Objectives • Match the 7 Market Ethics Key Terms introduced in the Section 2: The Cheating Game text material on TRACS to their definitions. • Given specific ethical situations, determine whether a new regulation or punishment is warranted. • Given specific market situations, determine the effects of specific ethical violations. • Given specific ethical situations, determine whether a new regulation or punishment is warranted. • Given specific market situations, determine the effects of specific ethical violations.
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