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22 Cards in this Set

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  • Back
What are the 4 factors of production?
Land
Labor
Capital (Investment goods)
Entrepreneurial Ability
What are the 4 responsibilities of an entrepreneur?
1) Takes initiative
2) Makes strategic decisions
3) Innovator
4) Risk bearer
What are the 4 resource payments?
Rent
Wages
Interest
Profits
Full employment means?
Us eof all available resources
Productive efficiency?
Production of G+S thru LEAST COSTLY WAY
Allocative Efficiency?
Least-cost production of THOSE G+S that provide MAXIMUM SATISFACTION OF ECONOMY'S WANTS.
Production Possibilities Model assumes what 4 things?
1) Full employment and productive efficiency
2) Fixed resources
3) Fixed technology
4) Only two goods produced in economy: Consumer (Pizza) and Capital (Robots)
Number 1 Economizing Problem (Think 'lunch')
There is no such thing as a free lunch.
Production Frontier?
Shows the limits of attainable outputs
Law of Increasing Opportunity Costs?
The more of a product that is produced, the greater is its opportunity cost ("marginal" being implied)
Problem with Adaptability?
Economic Resources are not completely adaptable to alternative uses
Increases in Economic Growth due to:
1) Increases in Technology
2) Increases in Quantity and Quality of Resources
What 2 international factors enable a nation to obtain more goods than its PPC indicates?
International Trade
International Specilization
What are the 2 types of economic systems?
Market System
Command System
Market System?
·Capitalism
- Private individuals own most resources and markets coordiante most economic activity
Command System?
·Socialism, Communism
- Government owns most resources and central planners coordinate most economic activity
4 contributors to Cicular Flow Model (from top and clockwise)?
Resource Market
Households
Product Market
Businesses
Flow of Circular Flow Model?
From Resource Market, Money income flows clockwise
From Resource Market, Resources flow (real flow) counterclockwise
Relationship btwn Households and Resource Market
Households give Resources to Market in exchange for Income
Relationship btwn Households and Product Market
Product Market sells the products in exchange for Consumption Expenditures
Relationship btwn Businesses and Resource Market
Businesses pay costs of resources in exchange for resources
Relationship btwn Businesses and Product Market
Businesses give G+S (aka products) in exchange for Revenue