Chapter 4- Economics Flashcards
define economics
the study of how people use scarce resources in order to satisfy unlimited needs and wants
define demand
when individuals attempt to satisfy their needs and wants by purchasing a good or service
define quantity demanded
the quantity of a good or service that an individual is willing and able to buy at a certain price.
When does the quantity demanded change?
When the prices changes.
what is the demand schedule?
a table that lists the quantify demanded for a good that people are willing and able to buy at all possible prices
What is the market demand schedule?
a table that lists the quantity demanded for a good or service that people throughout the whole economy are willing and able to buy at all possible prices.
What is supply?
the relationship between the quantity of a good or service and its price. it’s home much of a product or service is available for sale in a market.
What is the supply schedule?
a table that illustrates all the quantities supplied at different prices. the supply schedule shows you how the supply changes when you increase or decrease the price
What is the market supply schedule?
a table that lists the quantity supplied for a good or service that suppliers throughout the whole economy are willing and able to supply at all possible prices.
Define economy
the management of the resources of a country
What is the basic economic problem?
that needs and wants are unlimited, but resources are scarce.
what are resources?
Also known as factors of production, include land, labor, capital and entrepreneurship
what does scarcity mean?
that resources are limited, and because resources are scarce, people must make choices.
What are incentives?
rewards that motivate people to behave in certain ways.
What is the circular flow model?
includes households, businesses and governments and shows how money moves around in a simple market economy.