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23 Cards in this Set
- Front
- Back
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scarcity
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caused by unlimited wants and limited resources
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factors of production
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integral parts in the production of things consumers want
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four factors of production
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1. land
2. capital 3. labor 4. entrepreneurs |
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key elements of study of economics
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1. description
2. analysis 3. explanation 4. prediction |
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good
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useful, tangible item that satisfies a want
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service
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economic product performed for someone
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paradox of value
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some survival necessities (like water) have very low monetary value whereas some nonnecessities (like diamonds) have very high value
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circular flow of economic activity
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wages/salaries that individuals receive from businesses in factor markets return to businesses in product markets
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economics
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study of production and distribution of scarce resources
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scarce
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a resource that someone is willing to give up in order to get
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econ rule #1
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every economic system faces scarcity
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trade-offs
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decisions between choices
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opportunity costs
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what you give up in order to get something else
*making a trade-off incurs opportunity cost |
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econ rule #2
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every economic system faces choices of how to make best use of what they have
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WHAT
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USA- consumer goods/services
JAPAN- capital goods USSR- military goods |
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HOW
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1. private firms (BOD)
2. gov't (public schools) |
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FOR WHOM
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capitalist- who can pay?
socialist- everyone |
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microeconomics
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individual human behavior- what motivates us to buy
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macroeconomics
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entire countries' behavior
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What are property interests (entitlements)?
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What are property interests (entitlements)?
Right to public education; welfare benefits; liability benefits; continued public employment where termination can only be “for cause”; revocation of a driver’s license |
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production possibilities frontier/curve
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shows opportunity cost & trade offs, growth over time
(assume all factors of production engaged) |
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circular flow of market economy
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-dual role of labor and consumer
-interdependence of market economy |
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types of goods
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-consumer
-capital -military -durable -non durable |
