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28 Cards in this Set
- Front
- Back
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Economics
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The study of how people make choices about ways to use limited resources to fulfill their wants
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Scarcity
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The basic economic problem that results from a combination of limited resources and unlimited wants
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Factors of Production
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1. land
2. labor 3. capital 4. entrepreneurship |
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land
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natural resources and surface land and water
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labor
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human effort directed toward producing goods and services
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services
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actions that can satisfy people's wants or needs
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capital
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previously manufactured goods used to make other goods and services
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productivity
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the amount of output that results from a given level of inputs
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entrepreneurship
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when individuals take risks to develop new products and start new businesses in order to make profits
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technology
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the use of science to develop new products and new methods for producing and distributing goods and services
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trade-off
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scarificing one good or service to purchase or produce another
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opportunity cost
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value of the next best alternative given up for the alternative that was chosen
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production possibilities curve
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*graph
shows the maximum comvinations of goods and services that can be produced from a fixed amount of resources in a given period of time |
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economic system
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way in which a nation uses its resources to satisfy its people's needs and wants
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traditional economy
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system in which economic decisions are based on customs and beliefs that have been handed down from generation to generation
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command economy
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system in which the government controls the factors of production and makes all decisions about their use
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market economy
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system in which individuals own the factors of production and make economic decisions through free interaction while looking out for their own and their own families best interests.
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market
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the process of freely exchanging goods and services between buyers and sellers
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circular flow of income and output
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economic model that pictures income as flowing continously between businesses and consumers
** pg 39 in book |
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mixed economy
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system combining characteristics of more than one type of economy
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capitalism
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economic system in which pricate individuals own the factors of production
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laisez-faire system
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economic system in which the government minimizes its interference with the economy
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free-enterprise sytem
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system in which individuals own the factors of production and decide how to use them within the legal limits
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profit
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amount earned after a business subtracts its costs from its revenues
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profit incentive
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desire to make money that motivates people to produce and sell goods and services
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competition
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rivalry among producers or sellers of similar goods and services to win more business
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characteristics of the American Ecomony
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***page 46 of book
limited governement, freedom of enterprise, freedom of choice, profit incentive, competition, private property |
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economic efficiency
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wise use of available resources so as to obtain the greatest benefits possible
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