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12 Cards in this Set
- Front
- Back
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Command Economy
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economy-central planning used to coordinate most economic activities
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Traditional Economy
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patterns of past economic activity are repeated to determine what is produced, how its produced, and who gets it.
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Market Economy
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- markets used to answer the basic economic questions, relying on private decisions of firms and buyers
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Consumer Sovreinty
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Consumers determine what is produced based on what they buy
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Product Markets
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households as buyers and firms as sellers of goods and services
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Factor Markets
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households as sellers of land, labor, capital, entrepreneurship, to firms as buyers of these factors of production
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Production Possibilities line or frontere
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Graphs showing the potential output in a two good economy, with a given level of resources and technology
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Law of increasing opportunity cost
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as society produces more of a given good, the opportunity costs for such production increase alongside the increased production.
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Consumer Goods
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goods intended for use and consumption now. Food, TVs etc
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Capital Goods
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- goods produced with an intent to use them in future production process, either in consumer or capital goods. Computers, machines, tools, factories.
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More investiment in capital goods
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better future
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PPF breakdown
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Scarcity - points outside frontier not attainable
Opportunity cost - to more of one thing, must give up something else Efficiency - on the PPF, not inside it Choice - alternative points on PPF Economic Growth (or decay) shifts in the PPF. |
