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31 Cards in this Set
- Front
- Back
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marginal cost |
the cost of producing |
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scarcity |
the principle that limited amounts of goods and services are available to meet unlimited wants |
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need |
something essential for survival |
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opportunity cost |
the most desirable alternative given up as the result of a decision (if you go on a date, your cost is the idea that you are giving up something to go on that date) |
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factors of production |
the resources that are used to make goods and services |
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land |
all natural resources used to produce goods and services |
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marginal benefit |
the extra benefit of adding one more unit |
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trade-off |
the alternatives that we give up when we choose one course of action over another |
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profit |
the amount of money a business receives in excess of it's expenses |
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laissez faire |
the doctrine that government generally should not intervene in the market place |
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socialism |
a range of economic and political systems based on the belief that wealth should be evenly distributed throughout society |
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competition |
the struggle among producers for the dollars of consumers |
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safety net |
a set of government programs that protect people who face unfavorable economic conditions |
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consumer sovereignty |
the power or consumers to decide what gets produced |
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shortage example |
consumers want pizza, but pizza place runs out :( |
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Guns or Butter |
a country decided to produce more military goods (guns) so they have less resources to devote to the consumer goods (butter) |
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underutilization of resources |
not using all of the resources that you could for the best production of goods and services |
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making a decision at the margin |
picking the next best thing |
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law of increasing costs |
as the cost of something goes up, then the production possibilities begin to alter or change because they don't make as much money |
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production possibilities curve |
shows the idea that you are making choices which are the best choices in your situation |
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frontier of a production possibilities curve |
the best possible place to make money |
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example of making a decision at the margin |
do you or do you not hire new workers? what is best for the company? |
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Entrepreneur |
a person who decides how to combine resources to make goods and services |
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advantages of a free market economy |
freedom of choice, better prices, more products to choose from, encourages growth in the companies |
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characteristics of a traditional economy |
relies on habit, custom, or ritual to decide the three kay economic choices. revolve around family, same thing year in and year out |
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product market |
the arena of exchange in which households purchase goods and services from firms |
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centrally planned economy |
an economic system in which the government makes all the decisions on the three key economic questions |
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describe the economy of the united states |
predominantly a mixed economy, lean more toward the free market |
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what two systems were linked in the soviet union and china? |
command economies, the idea of socialism, but mainly the idea of communism or a command economy |
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positive aspects of centrally planned economies |
wouldn't have to worry about being unemployed |
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Mixed economy examples |
US, Hong Kong, Canada, England |
