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