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Econ Ch. 1/2
| Question | Answer |
|---|---|
| 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
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