Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
38 Cards in this Set
- Front
- Back
|
Scarcity |
Lack of enough resources to satisfy all desired uses of those resources |
|
|
Four basic factors of production |
Land, labor, capital, entrepreneurship |
|
|
Factors of production |
Resource inputs used to produce goods and services |
|
|
Economy |
Grand sum of all production and consumption activities |
|
|
Economics |
Study of how to allocate scarce resources among competing uses |
|
|
Land |
All natural resources ( crude oil, water, air, minerals) |
|
|
Labor |
Skills and abilities to produce goods, quantity and quality of human resources |
|
|
Capital |
Final goods produced for further use in production (Machinery, etc) |
|
|
Entrepreneurship |
Assembling of resources to produce new or improved products and technology |
|
|
Opportunity cost |
Most desired goods and services that are forgone to obtain something else |
|
|
Production possibilities |
Alternate combinations of final goods and services that could be in production in a given time period with all available resources and technology |
|
|
Market mechanism |
Use of market prices and sales to signal desired outputs or resource allocations |
|
|
Laissez fair |
"Leave it alone" Non intervention by government in the market mechanism, it can do a better job itself |
|
|
Mixed economy |
Both market signals and government decide the allocation of resources |
|
|
Gross domestic product (GDP) |
Total market value of all final goods and services produced within a nation's borders in a given time period Basic measure of economy size |
|
|
Per capita GDP |
Dollar value of GDP ÷ total population Average GDP |
|
|
Economic growth |
Increase in output increase in output (real GDP) expansion of production possibilities |
|
|
Four major uses of total output (GDP) |
Consumption investment government services net exports |
|
|
Consumption |
Consumer goods and services bought for a person's own use |
|
|
Investment (business spending) |
Expenditures on (production of) new plant, equipment, and structures (capital) in a a given time period plus changes in business inventories |
|
|
Government services |
Federal, State, and local government's purchases of resources for police, education, law making, and highways |
|
|
Income transfers |
Payments to individuals for which no goods or services are exchanged (Social Security, unemployment benefits, Etc) |
|
|
Exports |
Goods and services sold to foreign buyers |
|
|
Imports |
Goods and services purchased from foreign sources |
|
|
Net exports |
Exports -- imports |
|
|
Trade deficit |
Importing more than is exported (negative net export) |
|
|
Comparative advantage |
Ability of a country to produce a specific good at a lower opportunity cost than its trading partner |
|
|
Human capital |
Knowledge and skills possessed by the workforce |
|
|
Capital-intensive |
Production processes that use a high ratio of capital to labor inputs |
|
|
Factor mobility |
Reallocating resources from one industry to another because of a change in demand or expanding or contracting industries |
|
|
Technology advancement |
Technology advancements in an economy can produce more output with existing resources |
|
|
Monopoly |
Firm that producesthis the entire market supply of a particular good or service |
|
|
Factor market |
A place where factors of production are bought and sold |
|
|
Product market |
Any place where products are bought and sold |
|
|
Supply |
Ability and willingness to sell (produce) specific qualities of a good at alternative prices in a given time period |
|
|
Demand |
Ability and willingness to buy specific quantities of a good at alternative prices in a given time period |
|
|
Law of demand |
Quantity of a good demanded in a given time period increases as its price falls |
|
|
Determinants of market demand |
Taste (desire for this) Income (of consumer) Other goods (availability and price) Expectations (for income, prices, tastes) Number of buyers |
