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30 Cards in this Set

  • Front
  • Back
Economics
The study of how people seek to satisfy their needs and wants by making choices
Social Science
People; Difficult to ID and control all the variables
Hard Science
Tangible Objects; Control Variables
Scarcity
Limited quantities of resources to meet unlimited wants
Guns or Butter
Choosing to produce more or less military goods than consumer goods
Shortage
When a good or service is unavailable
Surplus
Having more than you need
Needs
Things that are necessary for survival. Eg: Air; Food; Shelter
Wants
Desirable but not needed for survival. Eg: Cell Phone
Factors of Production
1. Land- Natural Resources
2. Labor- Workers
3. Physical Capital- Tools
4. Human Capital- Knowledge
5. Entrepreneurs- Organize/ Control other FOP
Land
Natural Resources used to make goods and services
Labor
Workers
Physical Capital
Tools
Human Capital
Knowledge
Entrepreneurship
Controlling/ Organizing FOP
3 Key Economic Questions
1. What g/s should be produced
2. How should they be produced
3. Who should receive them
Thinking at the Margin
Deciding if you should use one more unit of a resource
Marginal Revenue/Cost
Additional income from selling one more unit of a good....The cost of producing that unit
Trade-Off
An Alternative that we sacrifice when making a decision
Opportunity Cost
Something you give up when a decision is made
Law of Increasing Costs
Costs more to get to and from the maximums
Barter
Trade
Traditional Economy
Labor intensive; Needs > Wants
Command Economy
Government Controlled; Works quickly; Equity encouraged
Invisible Hand
Metaphorical hand that moves the economy
Laissez- Faire
HANDS OFF!!
Market Economy
Free Market; Capitalism
Communism
All Power in the hands of the Govt.
Socialism
Equality even in income/wealth
Collective
Large farm leased from the state to groups of peasant farmers