Econ. Basics Flashcards
needs & wants
necessities & luxuries
economic thinking
the wise use of available resources
scarcity
the world is finite, limited. availability of sources that r in demand = scarce. main problem of economics.
opportunity cost
short/long term negative effects of a decision. value lost.
opportunity benefit
short/long term positive effects of a decision. value gained.
economic theorem
If needs & wants r unlimited & resources r limited, then the wise use of available resources = necessary for success
3 Basic Economic Q’s
What 2 Produce, How 2 Produce, & For Whom 2 Produce
What 2 Produce
use readily available resources
How 2 Produce
quality or quantity?
For Whom to Produce
demographic
4 Econ. Systems
traditional, market, command, mixed
traditional economy
bartering breeds inconsistent success
market economy
hypothetical. not influenced by gov’t, but instead by greed. demand driven by consumers.
command economy
do exist. complete & dictatorial. gov’t controls 3 Q’s
mixed economy
blend of command & market
may have gov’t interference:
to promote fair competition
to protect national security
to promote the well-being of the state
4 Factors of Production
land, labor, capital, management
land
space to produce; literal/figurative
literal land
farmers, industrial
figurative land
laboratory access, cyberspace
labor
manufactring. quantitative/qualitative
capital (4 factors)
liquidating assets; fuel 4 production
management
hiring other managers (efficient & loyal, responsible 4 success)
entrepeneur
self-starter in business
what 2 categories r combined?
4 factors of production & 4 levels of industry




