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23 Cards in this Set

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  • Back
Economizing problem
Society's economic wants(unlimited)
Economic Resources (limited and scarce)
Object of Economic Activity
to fulfill people's wants
Economic Resources
all natural, human, and manufactured resources that go into the production of goods and services
Property Resources
land, raw material, and capital
Human Resources
labor and entrepreneurial ability
Capital
all manufactured aids used in producing consumer goods and services. ex tools,machinery, equipment
Investment
process of producing and purchasing capital goods is known as investment
Capital goods vs. Consumer Goods
Consumer goods satisfy wants directly and capital do us indirectly by aiding the production of consumer goods
Entrepreneurial ability
takes the initiative, makes strategic business decisions, an innovator, and takes risks
Rental income & Interest Income
the income recieved from supplying raw materials and capital equipment
Full employment
the use of all available resources
Full production
all employed resources must be used so that they provide the maximum possible satisfaction of our economic wants.
Productive efficency
production of any particular mix of goods and services in the least costly way.
allocative efficency
least-cost production of that particular mix of goods and services most wanted by society.
Opportunity cost
the amount of other products that must be sacrificed to obtain 1 unit of a specific good.
Law of increasing opportunity costs
The more of a product that is produced, the greater is its opportunity cost.
Economic Growth
increases in supplies of resources, improvements in resource quality, and technological advances.
Economic System
a particular set of institutional arrangments and a corrdinating mechanism
marketsystem/capitalism
private ownership of resources and the use of markets and prices to coordinate and direct economic activity.
Command system/Socialism/Communism
Government owns most property resources and economic decision making occurs through a central economic plan.
Resource Market
the place where resource of the service of resouce suppliers are bought and sold
(Households and Businesses)
Product Market
place where goods and services produced by businesses are bought and sold.
Circular flow model
interelated web of decision making and economic activity involving households and businesses.