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29 Cards in this Set
- Front
- Back
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Capitalism |
the private ownership of resources by the individuals, rather than by the government |
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Command economy |
an economy in which resources are owned and controlled by the government |
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Consumer |
a person who buys and uses goods and services
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Demand |
the quantity of a good or service that consumers are willing and able to buy |
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Economic decision-making |
the process of choosing which wants, among several options, will be satisfied |
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Economic resources |
the means through which goods and services are produced |
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Economic system |
a nation’s plan for answering the three economic questions |
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Goods |
things you can see and touch; they are products you can purchase to meet your wants and needs |
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Market economy |
an economy in which the resources are owned and controlled by the people of the country
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Market price |
the point where supply and demand are equal |
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Mixed economy |
an economy that combines elements of the command and market economies |
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Needs |
things that are required in order to live |
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Opportunity cost |
the value of the next-best alternative that you did not choose |
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Producers |
individuals and organizations that determine what products and services will be available for sale |
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Scarcity |
not having enough resources to satisfy every need |
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Services |
activities that are consumed at the same time they are produced |
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Supply |
the quantity of a good or service that businesses are willing and able to provide |
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Trade-off |
what you make when you give something up to have something else |
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Wants |
things that add comfort and pleasure to your life |
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Law of Demand |
if all things are equal, consumers will demand more of a product as its price decreases, and less of a product as its price increases |
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Law of Supply |
if all things are equal, producers will supply more of a product as its price increases, and less of a product as its price decreases |
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Complementary good |
items that are almost always consumed or used together |
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Substitute good |
items that may replace each other when used or consumed |
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Surplus |
when supply exceeds demand |
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Shortage |
when supply is less than demand |
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The Basic Economic Problem |
the mismatch of unlimited wants/needs and the limited economic resources |
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3 types of economic resources |
natural resources, human resources, capital resources |
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6 steps in the decision-making process |
1. define the problem 2. identify the choices 3. evaluate the advantages and disadvantages of each choice 4. choose one 5. act on your choice 6. review your decision |
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3 economic questions all economies must answer |
1. What goods and services will be produced? 2. How will the goods and services be produced? 3. What needs and wants will be satisfied with the goods and services produced? |
