Economics Key Concepts Quiz

Study of how societies use scarce resources to produce valuable commodities and distribute them among different people.
Concerned with production, distribution, and consumption of goods and services.

Scarcity
- Limited availability of resources compared to unlimited wants.
Supply and Demand
- Supply: Quantity of a good that producers are willing to sell at different prices.
- Demand: Quantity of a good that consumers are willing to purchase at different prices.
- The interaction determines market prices.
Opportunity Cost
- The value of the next best alternative foregone when making a choice.
Market Structures
- Perfect Competition: Many firms, identical products, easy entry and exit.
- Monopoly: Single firm dominates the market, unique product, high barriers to entry.
- Oligopoly: Few firms dominate, products may be identical or differentiated.
- Monopolistic Competition: Many firms, differentiated products, low barriers to entry.

Capitalism
- Private ownership of resources, market-driven economy.
Socialism
- Public ownership of resources, planned economy.
Mixed Economy
- Combination of capitalism and socialism, allowing both private and public ownership.

Macroeconomics: Study of the economy as a whole, focusing on aggregate indicators like GDP, unemployment rates, and inflation.
Microeconomics: Study of individual consumers and firms, focusing on supply and demand in specific markets.

Gross Domestic Product (GDP)
- Total value of goods and services produced in a country over a specific time period.
Unemployment Rate
- Percentage of the labor force that is jobless and actively seeking employment.
Inflation Rate
- Rate at which the general level of prices for goods and services rises, eroding purchasing power.
Consumer Price Index (CPI)
- Measures changes in the price level of a basket of consumer goods and services.

Fiscal Policy: Government adjustments in spending and taxation to influence the economy.
Monetary Policy: Central bank activities to control the money supply and interest rates.

Trade: Exchange of goods and services between countries.
Balance of Payments: Record of all economic transactions between residents of a country and the rest of the world.
Exchange Rates: Value of one currency for the purpose of conversion to another.

Classical Economics: Belief in free markets and the invisible hand guiding economic activity.
Keynesian Economics: Advocates for government intervention to manage economic cycles.
Supply-Side Economics: Focuses on boosting economic growth by increasing supply (production).

Income inequality, globalization, trade wars, climate change effects on economies, and the impact of technology on jobs and production.

Scarcity: Resources are limited while human wants are unlimited, necessitating choices.
Supply and Demand:
- Supply refers to the amount of a good producers are willing to sell at various prices.
- Demand is the amount consumers are willing to buy at different prices.
- Their interaction establishes market prices.
Opportunity Cost: Represents the value of the next best alternative that is given up when a decision is made.
Market Structures:
- Perfect Competition: Many sellers, identical products, and easy market entry/exit.
- Monopoly: Single seller dominates the market with a unique product and high barriers to entry.
- Oligopoly: Few firms hold the market, offering either identical or differentiated products.
- Monopolistic Competition: Many sellers offer differentiated products with low market entry barriers.

Capitalism: Characterized by private ownership and a market-driven economy.
Socialism: Involves public ownership and a centrally planned economy.
Mixed Economy: A hybrid system incorporating elements of both capitalism and socialism.

Macroeconomics: Analyzes the economy as a whole, focusing on broad indicators such as GDP, unemployment, and inflation.
Microeconomics: Examines individual consumers and firms, emphasizing supply and demand dynamics in specific markets.

Gross Domestic Product (GDP): Measures the total value of all goods and services produced within a country over a specific time frame.
Unemployment Rate: The percentage of the labor force that is without a job but actively seeking employment.
Inflation Rate: The pace at which prices for goods and services rise, affecting purchasing power.
Consumer Price Index (CPI): Tracks changes in the price levels of a fixed basket of consumer goods and services.

Fiscal Policy: Involves government spending and taxation adjustments to influence economic activity.
Monetary Policy: Conducted by the central bank to regulate the money supply and interest rates.

Trade: Facilitates the exchange of goods and services between nations.
Balance of Payments: Comprehensive record of all economic transactions between a country and the rest of the world.
Exchange Rates: Indicates the value of one currency when converted to another, affecting trade and investment flows.

Classical Economics: Emphasizes the efficiency of free markets and the role of the invisible hand in economic guidance.
Keynesian Economics: Supports government intervention to stabilize economic cycles and mitigate recessions.
Supply-Side Economics: Advocates for improving economic growth by enhancing production capabilities.

Challenges include income inequality, the impacts of globalization, trade disputes, climate change influences on economies, and technological changes affecting employment and production.