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21 Cards in this Set

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  • Back
  • 3rd side (hint)
What are the 5 characteristics of a market system?
Economic Freedom, Economic Incentives, Competitive Markets, Private Property, and Limited Government
Blue Worksheet
Explain what Scarcity means, and what effect is has on the economy.
Scarcity is the question every economic society has to answer - It is simply not possible to have everything!!! Scarcity is the problem of not having enough. Scarcity is the problem of limited resources and unlimited wants.
What are the basic economic questions, and how are they answered in a market economy?
What should be produced? How many should be produced? What methods should be used? How should the goods and services be distributed?
What questions did you have to anwer for business day?
What are the differences from a market and command economic system?
In a market system, the producers get to decide what to make and how many etc. In a command economic system, the government decides the answers to all of the basic economic questions.
Basic Economic Questions.
What is cost?
Cost can be anything that stops you can't do when you do something else. So it might cost you money, time, etc.
Buffy McToon
What is an intensive?
An intensive is when you use of the four factors of production signifigantly more than the others.
Stay warm on a cold day...
What are the four factors of production and what do they mean?
Land, Labor, Capital, Entrepeneurship. Land is natural resources such as soils, minerals, forests, rivers, and any animals. Labor is human physical and mental skills applied to production. Capital is money, or products or machines used to make other products. Entrepeneurship is the act of combining land, labor and capital resources in a productive way.
Stay warm on a cold day still....
What does cost-effective mean?
Cost-effective is the cheapest way to produce something possible, yet maintaining good quality.
What are goods and services? Explain how they are used.
Goods are manufactured products that people use, and Services are useful labors performed for others, such as tutoring or coaching.
What is Economics?
Economics is the study of how people, both individually and in groups, deal with the problem of scarcity.
What is an opportunity cost, and what is a trade-off?
A Trade off is what has been given up in order to have something else. An opportunity cost is the cost of the loss of the next most good service/good that could have produced with a certain resource.
What to give up?
What does profit mean?
Profit is the total amount of money that somebody or a company recieves for a product or service minus all the costs of production
What is a competitive market?
Competitive markets are markets in which a wide variety of goods are offered for sale, and where prices are kept low, with high quality.
What is a voluntary exchange?
A voluntary exchange is an exchange in which both the buyer and seller must feel that they will benefit from the terms of trade.
How do the buyer and seller feel?
What is GNP and Real GNP and how do they differ? And how are both useful to know in an economy?
GNP is gross national product, and that means the total value of the final goods and services produced in a country during a year. "Real" GNP is the total GNP with adjustments for price changes during the year. For example, if the total GNP was $1000 and in the next year the total GNP was $1001. People would think the economy was doing better, but in truth, the price of all clothes went up, so less clothes were sold for a higher price.
What is Laissez-Faire?
Laissez-Faire is a system in which the government allows all economic decisions to be determined by market forces. (It also means that the government has no say in answering any of the four basic economic questions)
Pure Market System
What is limited government?
Limited Government is when in a pure market system, the government would provide the structure within which the market system would operate.
The structure
What is National Income?
National Income is the amount of money flowing from the companies to the households.
Circular Flow Chart
What are Factor markets and Product Markets?
Factor markets are transactions in which households sell resources to firms. Product markets are the exact opposite, and they have the households buying from the firms.
Circular Flow Chart
What is the government's role and why has it changed?
The Government Establishes Rules, Enforces Rules, and Settles Disputes. The U.S. has given the market system the ablilty to place taxes on foreign goods and on the people directly. But know if you want to build a house etc, you have to follow certain codes about how big it can be etc.
Law Codes
How is the U.S. a "mixed" system?
The U.S. lets the markets make whatever they want, but the government makes sure that things have to pass certain safety laws etc..
Also Law Codes