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74 Cards in this Set
- Front
- Back
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Exchange |
to give something in return for something else |
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Voluntary |
done freely without being forced by someone else |
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Property |
a characteristic trait/attribute/virtue possessed by something/someone |
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Outcome |
something that results from something else |
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Good |
objects that satisfy people's needs/wants |
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Service |
act/type of work done for someone else - normally for $$ |
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Barter |
to trade goods/services without exchange of $$ |
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Production |
the creation of goods/services to satisfy wants/needs |
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Resource |
input used to produce goods/services |
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Allocation |
setting aside resources for a specific purpose |
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Consumption |
using a good/service |
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Distribution |
taking things from one place to another |
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Economic Goals (5) |
efficiency growth security equality freedom |
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efficiency |
producing something with as little waste as possible |
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growth |
an increase in something |
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security |
protection against risk/danger |
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equity |
fairness |
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freedom |
the absence of an obstacle |
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scarcity |
demand is greater than supply |
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specialize |
to pursue a specific activity, occupation, field of study |
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factors of production |
different types of resources needed to produce goods/services (land, labor, capital) |
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capital |
resources created by humans to aid in production processes |
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four fundamental questions |
1) What is to be produced? 2) How is production organized? 3) How are goods/services distributed? 4) What is an effective allocation of resources? |
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free-market system |
a system where economic decisions are made by the free choices of producers and consumers |
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capitalism |
system of private ownership and free exchange -allocation, production, and distribution are organized by the free choices of producers |
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consumer's role |
choices of consumers affect the choices of the producers |
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Circle of production in a free-market economy |
producers make goods/services and give wages, payments, and profit consumers purchase and provide land, labor, and capital |
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coercion |
use of force/threats that affects someone's choice |
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fraud |
intentional misrepresentation of reality for financial gain |
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private property |
individual ownership of the factors of production |
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property rights |
rights to private ownership of land, labor, and capital |
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market forces |
properties of free-market system that lead to unintended outcomes |
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profit motive |
desire to make money out of production |
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profit |
total revenue - total cost =profit |
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loss |
where cost is greater than revenue |
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innovation |
finding new or better ways to do things |
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incentive |
cost or benefit that motivates a decision or action |
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advocates |
people who speak or write in favor of something |
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intervention |
getting involved or interfering |
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command economy |
a system where government tells producers what or how to produce |
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planned economy |
economic system run by government in a command economy |
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command economy government roles (7) |
1) assigns production goals to producers 2) allocates resources to producers 3) sets prices 4) decides where people will work 5) sets wages 6) sells goods and services 7) decides who gets what and how much they get |
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socialism |
system aimed at equality of weath |
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theory |
an ideal about how things should be organized |
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mixed economy |
system that follows both free market and command economy principles |
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cost-benefit analysis |
decision-making process that seeks to maximize benefits and minimize costs |
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benefit |
something good you get or bad you can avoid |
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cost |
something good you lose or bad you take |
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rational |
following reason or logic |
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monetary |
able to be measure in terms of money |
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subjective |
varying from one individual to another |
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economic reasoning |
cost-benefit analysis |
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economic indicators |
measurements used to judge the condition of the economy (ie: GDP, growth rates, unemployment rates, inflation rates) |
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gross domestic product (GDP) |
value of all goods/services produced in a country GDP=private consumption+government spending+investments+exports-imports |
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stagnating |
neither growing nor shrinking |
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per capita |
average amount per person |
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unemployment rate |
percent of workers out of work but willing to work |
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inflation |
rising prices for goods and services |
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consumer price index |
measure of average change in prices of certain goods and services typically purchased |
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inflation rate |
increase of average level of prices |
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inflation-adjusted price |
adjusted prices from past to the present cost |
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technology |
advancements or applications that improve results |
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method |
a way of doing things |
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productivity |
the speed at which things are goods and services are made |
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assembly line |
a method of production that involves lining up workers to assemble a product in stages using simple, repetitive tasks one of the most powerful production methods |
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ripple effect |
when one change results in a series of other changes |
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standardize |
to get everyone to do things the same way |
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marketplace |
a place where goods and services are sold |
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communication |
the sharing of information between two or more people |
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e-commerce |
online buying and selling |
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retail |
the sale of goods directly to the consumers |
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economy |
activities related to the production and distribution of goods and services in a particular geographic region |
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conflict |
a situation of disagreement |
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minimum wage |
lowest hourly wage that can legally be paid to an employee |
