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22 Cards in this Set
- Front
- Back
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Economics |
Study of how people allocate their scarce resources |
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Opportunity Cost |
Value of the item that you have to give up to get what you want |
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Scarcity |
Gap between wants and needs and resources |
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Trade-off |
Necessity to choose |
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Needs |
Things essential for survival |
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Wants |
Not needed, but desired |
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Profit |
Money businesses have left over |
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Rent |
Price for use of land |
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Interest |
The price for using someone else's money |
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Margin |
Cost of the next unit |
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Wages |
Price for labor |
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Market Economy |
Individuals make decisions and controls f.o.p. For self interest |
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Command Economy |
Government makes decisions and controls f.o.p. For common good |
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3 Mixed systems |
1. Capitalism (Smith) 2. Socialism 3. Communism (Marx) |
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Factors of Production |
1. Land 2. Capital 3. Labor 4. Entrepeneurial Ability |
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Why is it important to have an economic system? |
We need a way to allocate our scarce resourses |
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Adam Smith |
-Capitalism -"Wealth of the Nations" -2 natural laws: 1. Supply and Demand, 2. Competition
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Karl Marx |
-Communism -"The Communist Manifesto" -Haves and the Have nots |
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Decision makers in the market economy |
1. Households 2. Businesses |
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Two markets in which decision-makers interact |
1. Resource Market 2. Product Market |
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Resources flow from _______ to _______ |
Households to Businesses
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Goods and services flow from _______ to _______ |
Business to Households |
