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22 Cards in this Set

  • Front
  • Back

economics

A social science (study of people) that studies how people decide to use scarce resources (money) to satisfy their wants. It can be done individually or in groups.




The study of how people or groups of people decide how to use the money they have.

production

A process that combines economics resources so the result is a good or service that is available for sale.




Making things that can be sold.

distribution

The process of getting a product or service to the consumers - before the want or need can be satisfied.




Getting a product to people before they buy something else.

consumption

Using a product or service. This is the last part of the want-satisfaction chain.

land

Unaltered gifts of nature such as soil, minerals, timber and fresh water.

labor

Also known as human resources = people doing a job.




physical and mental efforts people use to create goods and services.

capital

The buildings, tools and machines people create and use to produce final goods and services.

factors of production

The factors of production are 1) Land, 2) labor and 3) capital resources.

entrepreneurship

The imagination, innovative thinking, and management skills needed to start and operate a business.

scarcity

An inequality exists between wants and the resources available to satisfy them.




There is not enough of a product. Everyone who wants one cannot get it.

opportunity cost

The highest valued alternative given up as a result of making a choice.




Example: Your family can buy a new TV or go on a vacation. If they decide to go on the vacation the opportunity cost is the TV (you cannot buy it if you go on vacation).

benefits

Gains (what you get)




Benefits and costs go together. You give up something (cost) to get something (benefit).




When you buy a new outfit, the benefit is the outfit, the cost is the amount of money you spend.

costs

losses (what you lose)




Benefits and costs go together. You give up something (cost) to get something (benefit).




When you buy a new outfit, the benefit is the outfit, the cost is the amount of money you spend.

incentives

Positive rewards for making some kind of choice or behaving in a certain way.

disincentives

Fines or punishment.

trade

Exchanging something for something else.

marginal

The extra or additional costs or benefits o a decision.

profit

The positive difference between total sales and total costs.




The total sales must be higher than the total costs to make a profit.




Profit is the money you get to keep.

market economy

An economy that relies on voluntary trade as the primary means of organizing and coordinating production. This United States has this kind of market.




The USA has a market economy. People set up businesses and sell things to others. The government does not set up or control businesses.

market

An arrangement that allows buyers and sellers to make exchanges (deals).

macroeconomics

The study of the economy as a whole. (the whole country or the whole world)

microeconomics

The study of individual consumers and businesses. (the study of a person who buys things or of individual businesses)