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18 Cards in this Set
- Front
- Back
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In the factors of production, what is land?
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Land is all the natural resources used to produce goods and services, materials found in nature: above, on, or below ground.
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In the factors of production, what is labor?
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The effort that a person devotes to a task for which that person is paid.
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In the factors of production, define the two types of capital.
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1. The physical capital, human-made objects used to create other goods and services (buildings and tools).
2. Human capital, which is knowledge and skills a worker gains through education and work experience. |
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Define opportunity cost.
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The most desirable alternative given up as a result of a decision.
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Write out the three economic questions.
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1. What goods and services should be produced?
2. How should goods and services be produced? 3. Who consumes goods and services? |
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Explain how a traditional economy functions.
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Very habitually. There is little innovation or change, and there are particular tasks for certain genders.
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Explain how a command economy functions.
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According to the government's decisions in the centrally-planned economy.
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What motivates economic transactions according to Adam Smith?
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Self-interest.
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Name an advantage of the free market.
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Economic efficiency - it's self-regulating, it responds efficiently to rapidly changing conditions. Producers make only what producers want, when they want it, and generally at prices they are willing to pay.
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Relate Soviet communism to the preamble to Star Trek.
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They are both five year plans.
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What is a disadvantage of a centrally-planned economy?
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Poor quality, serious shortages of non-priority goods and services, and diminishing production.
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What is an advantage of a centrally-planned economy?
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The use for jumpstarting selected industries and guaranteeing jobs and income.
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Relate laissez-faire economics to On the Origin of the Species.
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Theories that populations evolve over the course of generations through a process called natural selection.
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In what way does laissez-faire economics fail a state?
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The government needs to intervene in some cases - like in protecting property rights, enforcing contracts, and education. There would be little incentive to develop new products without property rights or patent laws, and some needs that markets could meet fall to governments so that all members of society can participate.
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What can the Chinese not allow laissez-faire economics?
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To complete domination going to the government. One quarter of all enterprises are at least partly owned by individuals.
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Specifically, how does the Constitution protect private property rights?
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By the 5th amendment which states that nobody can "be deprived of life, liberty, or property without due process of law; nor shall public property be taken for public use without just compensation." The 14th amendment extends this to the states.
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What is the difference between macroeconomics and microeconomics?
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Macroeconomics is the study of the behavior and decision-making of the entire economies, while microeconomics is the study of small units like individuals and families.
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What is the focus of Bundesbank and why?
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To maintain price stability because it is an integral part of the European systems of central banks...
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