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Economics ch 1 and 2
Economics Ch 1 and 2
| Question | Answer |
|---|---|
| this exists when demand is greater than the supply | scarcity |
| the study of limited resources are used to fulfill unlimited wants. | Economics |
| resources needed to produce goods and services | factors of production |
| natural resources present without human intervention, such as land, water, fish, minerals... | land |
| the work people do | labor |
| activities done for a fee | services |
| tangible items that people buy | goods |
| manufactured goods used to make other goods and services, such as tools or machinery. Investments are also included in this category. | capital (physical) |
| the ability to produce greater quantities of goods and services in better and faster ways. | productivity |
| the ability to start a new business, introduce new products and take risks to make a profit by utilizing the factors of production | entrepreneurship |
| the value of the next best alternative given up to do the action that was chosen | opportunity cost |
| exchanging one thing for use of another, such as buying a soda. | trade off |
| model used by economists so show the maximum combination of goods and services that can be produced from a fixed amount of resources in a given amount of time. They can help businesses determine what to produce | production possibility curve |
| simplified represenations of the real world | economic models |
| This economy tries to create a classless society, where governemnt offers a high degree of aid and services, however tax rates may be very high to pay for such programs. | Socialism |
| This economic theory, born in Europe during the Industrial Revolution, advocated a classless society led by workers after a violent revolution by the working class. | Communism (Marxism)....fyi, Marx lost several children during that time due to starvation. |
| temporary condition of not having enough resources | shortage |
| any use of land, labor or capital to produce goods more efficiently | technology |
| everything other than basic survival needs | want |
| when resources are not used efficiently; aka recession | underutilization |
| material well being of a person, group or nation | standard of living |
| the attempt to balance an economic policy so that everyone benefits fairly | economic equity |
| the wise use of available resources so that costs do not exceed benefits | economic efficiency |
| economic philosophy in which the government minimizes its interference in the economy | laissez faire |
| money left after all costs have been paid (wages, taxes, bills...) | profit |
| desire to make money that motivates people to produce and sell goods | profit incentive |
| economic system where private individuals own the factors of production | capitalism/market economy/free enterprise |
| economic system combining characteristics of a command and a market economy (government ownership of major industries with a degree of small privately owned businesses) | socialism |
| economic system in which individuals own the factors of production (aka capitalism) | free enterprise system |
| economic system based on customs passed down from generation to generation | traditional economy |
| economic system in which the gov't owns all of the factors of production | command economy (Communism) |
| way in which a nation uses its resoureces to satisfy it people's needs and wants | economic systems |
| graph showing the maximum combination of goods and services that can be produced from a fixed amount of resources in a given periodof time | production possibilities curve |
| whatever is owned by an individual instead of the gov't | private property |
| rivalry among producers or sellers of similar products to win more business | competition |
| Benefit of this economic system is the speed of decision making, such a rerouting resources. However, consumers have few choice and rights. | Communism |
| Advantages of this system include profit incentive and private property, but not all needs are met. | Free Enterprise |
Created by:
davislauren
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