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15 Cards in this Set
- Front
- Back
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Economics
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The study of how people seek to satisfy their need and wants by making choices.
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Scarcity
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Limited quantities of resources to meet unlimited wants.
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Opportunity Cost
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The most desirable alternative to give up as the result of a decision.
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Trade-Offs
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The alternative we sacrifice when we make a decision.
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Entrepreneur
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An ambitious individual who combines land, labor, and capital to create and market new goods or services.
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Factors of Production
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Land, Labor, and Capitol; the three groups of resources that are used to make all goods and services.
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Production Possibilities Curve
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A curve that shows an alternative way to use an economies resource.
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Law of Increasing Costs
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As we shift factors of production from making one good or service to another, the cost of producing the second item increases.
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Safety Net
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Government programs that protect people experiencing unfavorable economic conditions.
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Traditional Economy
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An system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and service.
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Market Economy
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Economic system in which decision on production and consumption of goods and services are based on voluntary exchange in markets.
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Centrally Planned Economy
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Economic system in which the central government makes all decisions on the production and consumption of goods and services.
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Factor Market
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A market in which firms purchase the factors of production from households.
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Product Market
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The market in which the households purchase the goods and services that firms produce.
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Adam Smith
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The father of Modern Economics, who was the first to explain how the free market economy works. The combination of self-interest and competition regulate the free market.
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