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16 Cards in this Set
- Front
- Back
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What is the definition of economics?
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It is the study of the production, consumption and distribution of resources. It is the study of how nations deal with the question of limited resources and unlimited wants.
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What are the three basic economic questions all societies must answer?
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What do we produce?
How do we produce it? For whom shall we produce it? |
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What is scarcity?
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Scarcity is the problem of having unlimited wants and limited resources.
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What are the three basic economic systems?
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Traditional
Market Command or Planned |
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How do traditional societies answer the three basic economic questions?
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They answer them the same way they have always been answered - by looking to the past, to custom, to the ways of one's ancestors.
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What are characteristics of traditional economies?
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hunter gatherers, bartering, small clans or groups, egalitarian division of labor and resources, self-sufficiency, making things they have always made, food production an essential activity
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What are the three basic kinds of resources?
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natural
human (labor) capital |
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What are capital resources?
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Resources that are human made in order to make something else (another product).
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What are the forms of human resources?
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Skilled and unskilled laborers.
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What agrarian economy was common throughout the Middle Ages in Europe?
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feudal manorialism.
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What is the basis of feudal wealth in the Middle Ages?
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Land.
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How does a command economy made the three basic economic decision?
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the government or central planners in the government make all or most of the decisions.
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How do market economies answer the three basic economic questions?
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Private individuals and privately owned businesses (consumers and producers) make decisions based on the laws of supply and demand in the freely operating marketplace. (also called free enterprise system)
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What are goods?
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Products produced that are tangible.
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What do most of the world's nation's have as their economic system?
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A mixed economic system.
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What are services?
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They are things that are produced and have value but are not tangible (plumber services, doctor, education, etc.)
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