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24 Cards in this Set

  • Front
  • Back
economizing problem
society has unlimited economic wants and limited resources
pleasure or satisfaction
economic resources
all natural, human, and manufactured resources that go into the production of goods and services
all natural resources used in the production process such as arable land, forests, mineral and oil deposits, and water resources
all manufactured aids used in producing consumer goods and services - that is, all tools, machinery, equipment, factory, storage, transportation, and distribution facilities
the process of producing and purchasing capital goods
all the physical and mental talents of individuals available and usable in producing goods and services
entrepreneurial ability
human resource that combines the other resources to produce a product, makes nonroutine decisions, innovates, and bears risks
factors of production
land, labor, capital, and entrepreneurial ability
full employment
the use of all available resources
full production
all employed resources should be used so that they provide the maximum possible satisfaction of our material wants
productive efficiency
the production of any particular mix of goods and services in the least costly way
allocative efficiency
the production of that particular mix of goods and services most wanted by society
consumer goods
products that satisfy our wants directly
capital goods
products that satisfy our wants indirectly by making possible more efficient production of consumer goods
production possibilities table
a list of the different combinations of two products that can be produced with a specific set of resources, full employment, and productive efficiency
production possibilities curve
graph of the production possibilities table
opportunity cost
the amount of other products that must be foregone or sacrificed to obtain one unit of a specific good
law of increasing opportunity cost
the more of a product that is produced, the greater its opportunity cost
economic growth
the ability to produce a larger total output because of increases in supplies of resources, improvements in resource quality, or technological advances
economic system
a particular set of institutional arrangements and a coordinating mechanism - who owns factors of production and method used to coordinate and direct economic activity
market system (capitalism)
the private ownership of resources and the use of markets and prices to coordinate and direct economic activity
command system
government owns most property resources and economic decision making occurs through a central economic board
circular flow model
an interrelated web of decision making and economic activity involving businesses and households where there is a counterclockwise real flow and a clockwise money flow