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47 Cards in this Set
- Front
- Back
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Need
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something necessary for survival
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Want
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item we desire but do not need for survival
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economics
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study of how people satisfy thier needs and wants
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scarcity
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limited quantities of resources to meet unlimited wants
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goods
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physical objects
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services
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actions or activites a person performs for another
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shortage
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producers can not or will not offer goods or services at the current price. temp ot long term
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factors of production
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land, labor & capital
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land
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natural resources used to produce goods & services
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labor
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effort person devited to a task for which a person is paid
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capital
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any human made resource that is used to produce other goods & services
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physical capital
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human made objects used to create other goods and services
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human capital
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knowledge and skills a worker gains through education & experience
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entreprenuer
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ambitious leaders who decide how to combine land, labor & capital resources to creat new goods and services
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trade-off
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alternatives we give up whenever we choose one course of action over another
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guns or butter
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country decides whether to produce more military guns & have fewer resources for consumer goods & vice versa
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thinking at the margin
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another factor in making decisions innvolves adding one unit or subtracting one unit
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production possibilities curve/graph
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graph that shows alternative ways to use an economys resources
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production possibilities frontier
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the line on a production possibilities graph that shows the maximum output
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efficiency
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using resources to maximize output of goods and services
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underutilization
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using fewer resources than an economy is capable of using
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cost
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the alternative we give up when we choose one option over another
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three economic questions
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what, how & who?
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factor payments
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income people recieve for supplying factors of production
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economic goals & values
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economic efficiency, freedom, security & predictability, equity, growth, innovation & additional goods
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safety net
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set of gov. programs that protect people experiencing unfavorable conditions
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standard of living
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level of economic prosperity
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traditional economy
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relies on habit, custom or ritual to decide what to produce, how & who
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market economy
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decisions made by individuals
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command economy
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in a centrally planned economy, gov. alone decides all three questions
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mixed economy
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little gov interference
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market
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arrangment that allows buyers & sellers to exchange things we have for things we want
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specialization
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produce one or fewer products
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household
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person/group living in the same residence
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firms
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business/organization that uses resources to produce a product which it then sells
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factor market
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firms purchase factors of production from households
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profit
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financial gain
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product market
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goods and services that firms produce that are purchased by households
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self interest
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own personal gain
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incentive
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hope of reward or fear of punishment
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adam smith
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laissez faire
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consumer soverreignty
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consumers decide what gets produced
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collectives
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large farms leased from the state to the peasants
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laissez faire
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Adam smith "gov should not intervene in the market place"
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private property
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property that is owned by individuals or companies
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privatize
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sold to individuals
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free enterprise
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gov only intervenes to keep oreder, provide vital services & promote general welfare
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