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18 Cards in this Set
- Front
- Back
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what is the basic economic problem?
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scarcity
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why does scarcity occur in a society?
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people's wants and needs are unlimited and the resources needed to produce goods and services to meet these wants and needs are limited
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what is the solution to the basic economic problem?
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allocation
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name the 2 kinds of choices that we must make in a society
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individual choices and social choices
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give an example of microeconomic choice and a macroeconomic choice
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micro - the farmer determines how much product produced based on the market price and the consumer decides what to purchase and how much based on retail price
macro- the gov. decides how to control inflation (cut back on spending, make credit difficult for consumers to get and raise taxes to cut consumer spending |
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what are the three basic economic questions?
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what will be produced with the limited resources?
how will the goods and services be produced? for whom will the goods and services be produced? |
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in the US today, why is coal produced by a capital-intensive process instead of a labor-intensive process?
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the opportunity of labor workers relative to capital machines went up
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the condition that occurs because people's wants and needs are unlimited, and the resources needed to produce goods and services to meet these wants and needs are limited
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scarcity
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the human characteristic of never feeling that all wants and needs have been satisfied
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unlimited wants and needs
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there are never enough resources to fulfill all wants and needs
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limited resources
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the process of choosing which needs will be satisfied and how much of our resources we will use to satisfy them
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allocation
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the social science that deals with how society allocates is scarce resources among its unlimited wants and needs
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economics
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the value of any alternative that you must give up when you make a choice
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opportunity cost
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what is gained by making a particular choice
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opportunity benefit
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the branch of economics that examines the choices and interaction of individuals concerning one product, one firm, or one industry
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microeconomics
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the branch of economics that examines the behavior of the whole economy at once
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macroeconomics
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a simplified description of reality
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theory
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the mix of goods that can be purchased, given a limited amount of income
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budget constraint
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