Chapter 1 Flashcards
fundamental economics problem facing all societies resulting from a combination of scarce resources and people’s virtually unlimited needs and wants
Scarcity
Social science dealing with how people satisfy seemingly unlimited and competing needs and wants with the careful use of scarce resources
Economics
basic requirements for survival, including food, clothing, and shelter.
Need
something we would like to have but it is not necessary for survival.
Want
tangible economic product that is useful, transferable to others, and used to satisfy wants and needs
Good
work or labor performed for someone; economic product that includes haircuts, home repairs, and forms of entertainment
Service
ability or capacity of a good or service to be useful and give satisfaction to someone
Utility
monetary value of all final goods, services, and structures produced within a country’s national borders during a one year period
Gross domestic product (GDP)
product resources needed to produce goods; the four factors are land, capital, labor, and entrepreneurship.
Factors of production
risking taking individuals who introduce new products or services in search of products; one of the four factors of production
Entrepreneurs
diagram representing all possible combinations of goods and/or services an economy can produce when all productive resources are fully employed
Production possibilities curve
cost of the next best alternative use of money, time, or resources, when one choice is made rather than another
opportunity cost
alternative that must be given up when one choice is made rather than another
trade-offs
a social movement that was aimed at promoting the interest of consumers
consumerism
increase in a nations total output of goods and services over time
economic growth
measure of the amount of output produced in a specific time period with a given amount of resources; normally refers to labor, but can apply to all factors of production
Productivity
assignments of tasks to the works, factories, regions, or nations that can perform them most efficiently
Specialization
Mutual dependence on the economic activities of one person, company, region, or nation on those of another person, company, region or nation
economic interdependence
comparison of the cost of an action to its benefits
cost-benefit analysis
market economy, in which privately owned businesses have the freedom to operate for a profit with limited government intervention
Free enterprise economy
How is a mixed economy different from a
capitalist economy?
A mix economy is both capitalism and government intervention while capitalist economy relies on private ownership and less government
Choose one type of economy. Define the
economy and its characteristics. List the
advantages and disadvantages (expound) of that
economy and some examples
A tradition economy is based on tradition and skills passed down through generations to survive
advantage: strong family ties, less environment destruction, meaning that their economy is less likely to crash
disadvantage: barely economic growth, and lack of technology, due to the lack of technology their economy is less likely to boom
why society face scarcity
our society wants unlimited supplies while we have limited resources to fulfill everyone’s needs
choices faced by all societies
what to produce, how to produce, for whom to produce
Factors of production
land, labor, entrepreneurship, capital
consumer rights
right to choose, safety, and be informed
simple models understand complex economies
simple model breaks down a complex situation into basic elements that are easy to understand
You have been offered a large sum of money in
order to start a new business in your
community. How will the four factors of
production affect your decision of what kind of
business to begin and where you will locate it?
How will your new business affect your
community and the choices they have?
when starting a new business with a large amount of money you have to keep in mind the 4 factors of production (land, labor, entrepreneurship, and capital) you need land to set up factories, labor to provide services, capital to invest in machinery.
