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Econ Ch. 1/2

the study of how people seek satisfaction of their needs and wants by making choices. economics
something like air, food, shelter, that is a necessary for survival. need
an item that we desire but that is not essential to survival. want
physical objects such as shoes and shirts goods
actions or activities that one person performs for another services
implies limited quantities of resources to meet unlimited wants scarcity
when producers will not or cannot offer goods and services at current prices shortage
the resources that are used to make all goods and services factor of production
all natural resources used to produce goods and services land
the effort that a person devotes to a task for pay labor
any human-made resources that are used to produce other goods and services capital;physical capital
knowledge and skills a worker gains through education and experience human capital
ambitious leaders who decide how to combine land. labor, and capital resources to create new goods and services entrepreneurs
all the alternatives that we give up whenever we choose one course of action over another trade-offs
a country that decides to produce more military goods has fewer resources to devote to consumer goods guns and butter
the most desirable alternative given up as the result of a decision opportunity cost
when you decide how much more or less to do thinking at the margin
a graph that shows alternative ways to use an economy's resources production possibilities curve
a line drawn that shows combinations of the production of both objects production possibilities frontier
using resources in such ways to maximize the production or output of any goods and services efficiency
using fewer resources that the economy is capable of using under-utilization
alternative way we give up when we choose one option over another cost
as production switches from one item to another , more and more resources are necessary to increase production of the second item law of increasing costs
a method used by society to produce and distribute goods and services economic system
are the income people receive for supplying factors of production factor payments
is the love of one's country-the passion that inspires a person to serve his or her country patriotism
set of government programs that protect people experiencing unfavorable economic conditions safety net
level of economic prosperity standard of living
habit, custom, ritual to decide what to produce and how to produce it traditional economy
economic decisions are made by individuals and are based on exchange or trade market economy
thee central government alone decides how to answer all three key economic questions centrally planned economy
sometimes known as centrally planned economies, because the central authority in is command of the economy command economies
marked-based economic systems in which government plays a limited role mixed economy
an arrangement that allows buyers and sellers to exchange things market
the concentration of the productive efforts of individuals and firms on a limited number of activities specialization
a person or group of people living in the same residence house hold
a business, or organization that uses resources to produce a product, which it then sells firm
an arena of exchange factor market
financial gain made in transaction profit
the market in which households purchase the goods and services that firms produce product market
one's own personal gain self-interest
the hope of reward or the fear of punishment that encourages a person to behave in a certain way incentive
the struggle among producers for the dollars of consumers competition
term economists use to describe the self regulating nature of the market place invisible hand
the power of consumers to decide what gets produced consumer sovereignty
a social and political philosophy based on the belief that democratic means should be used to evenly distribute wealth throughout a society socialism
a political system characterized by a centrally planned economy with all economic and political power resting in the hands of the central government communism
requiring strict obedience to an authority, such as a dictator authoritarian
large farm leased from the state to groups of peasant farmers collective
industry that requires large capital investments and that produces items used in other industries heavy industry
the doctrine that states that government generally should not intervene in the marketplace laissez faire
property owned by individuals or companies, not by the government or people as a whole private property
an economic system characterized by private or corporate ownership of capital goods, investments that are determined by private decision rather than by state control; and determined in a free market free enterprise
a range with no clear divisions continuum
period of change in which an economy moves away from a centrally planned economy toward a market-based system transition
to sell state-run firms to individuals privatize
Created by: jasontharp