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69 Cards in this Set

  • Front
  • Back


Something required for a person to live. (Food, Shelter, etc.)


Something that isn't necessary for survival but is still desirable (TV, Nice Clothes, etc.)


The study of decision making


Physical items produced by people to be consumed by others.


Actions performed for others with expectation of compensation.


When desirable resources are limited in quantity.


When there is less of a desired good or service than is expected.

Factors of Production

The elements that come together to form a completed product.


Unmodified natural resources (Unfiltered water, coal, ground.)


Effort provided by people to produce something.


The items or skills that are utilized by a person or business to make a product.

Physical Capital

Objects that in some way aid the production of finished goods; machinery.

Human Capital

Knowledge or skills of workers.


The person who puts the factors of production together in order to start a business.


When one option is given up in favor of another.

Guns or Butter

An all or nothing decision. Derived from a nation's decision to focus on militarism or agriculturalism.

Opportunity Cost

The next best alternative given up in a trade-off.

Thinking at the Margin

Considering the efficiency of a decision at every possible increment.

Productions Possibility Curve

A graph that depicts the most efficient production of multiple goods.

Productions Possibility Frontier

The edge of the PPC that represents maximum efficiency.


How fully resources are used in the creation of a product; how much is wasted.


When efficiency is not at its peak, making less than you can.


What is given up to produce something.

Law of Increasing Cost

To keep your rate of production constant, you must increase the amount of resources used.

Economic System

The basic guidelines as to how a group makes economic decisions.

Standard of Living

The level of wealth, comfort, and prosperity within a given group.

Traditional Economy

An economic system based on precedent and ritual.

Market Economy

An economic system with little to no government involvement in economic decisions.

Centrally Planned Economy

An economic system in which all economic decisions are controlled by the government.

Command Economy

Same as a Centrally Planned Economy.

Mixed Economy

A mix of aspects from both Market and Command Economies. Some government involvement and some freedom.


A place, literal or figurative, where buyers and sellers can trade goods.


Limiting production to only certain products.


When what you gain from selling a product or service is above the cost of developing it.


An interest in someone's own economic gain.


An expectation that motivates people to act a certain way.


Struggle between sellers to attract the most buyers.

Invisible Hand

Self-regulating nature of the market.


Democratically instituted command economy in which wealth is intended to be distributed evenly.


Command economy instituted by a forceful uprising of working-class people.

Vladimir Lenin

The founder of communism in Russia and in turn, the USSR.


A governmental philosophy requiring strict adherence to rules.


An economic philosophy proposing that governments relinquish all influence in their nation's economic markets.

Private Property

Property owned by individuals, not the government.

Free Enterprise

Private ownership of capital goods.


Selling governmental institutions to private owners.

Karl Marx

The founder of communism.

Adam Smith

The creator of Laissez-faire capitalism

Profit Motive

Financial gain made in a transaction.

Free Contract

People decide which arrangements they enter into.

Voluntary Exchange

People decide what they buy and sell.

Interest Group

An organization that speaks on behalf of a group of people.

Public Disclosure Laws

Laws requiring companies to provide full and true information about their products.

Public Interest

Concerns of people as a whole.


The study of how people in general make economic decisions.


The study of how small groups or individuals make economic decisions.

Gross Domestic Product

The total value of all goods and services produced within a nation.

Business Cycle

A repetitive pattern of economic expansion and contraction.

Work Ethic

A commitment to the quality of the product you produce.

Public Good

A good or service which must be provided for free.

Public Sector

Part of the economy which includes individuals and companies.

Private Sector

Part of the economy composed of the government.

Free Rider

People benefiting from goods or services provided as public goods for other people.

Market Failure

When the distribution of wealth in a market is not equal.


Effects of economic decisions on those they were not intended for.

Poverty Threshold

The amount of money deemed necessary for a person's survival.


Government aid for those in poverty.

Cash Transfers

Welfare through direct monetary allotments.

In-Kind Benefits

Welfare through the provision of goods or services.