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14 Cards in this Set
- Front
- Back
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authority/ command system
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an economic system that is controlled by a central authority which owns and allocates resources
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capital
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the manufactured resource. The tools and equipment that aid in production
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economic efficiency
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gaining the most output to maximize consumer utility with a given amount of input
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the economic problem
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the contrast between virtually unlimited human wants and the limited availability of resources
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entrepreneurial ability
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the entity in a market economy that combines land, labor and capital into a finished product or service
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factors of production
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the basic economic resources that are required in production - land, labor, capital, and entrepreneurial ability
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insatiable
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a human condition where wants are incapable of complete satisfaction
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increasing costs
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as the productivity of a factor of production decreases due to increasing production, the cost of successive units produced must increase
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labor
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the human resource. A certain amount of labor is required to produce any product
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land
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the natural resources that are required to produce any product
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market economy
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system that allows free interaction between buyer and seller in the market place. It is characterized by private ownership of resources.
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opportunity cost
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due to scarcity, the choice of one product means giving up something else. It is the alternative, not the chosen.
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production possibilities curve
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a model that shows the trade-off that exists between two goods or services that could potentially be produced by a full-employment, full out put economy assuming that all resources are fixed
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traditional economic system
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a system that allows prevailing customs to determine the allocation of resources
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