Econ Quiz 1 Flashcards
know this stuff
what is production
creating goods
what are resources
materials required for production
what is scarcity
inability to satisfy all wants
what is private property
Owned or provided by individuals or businesses.
what is public property
Owned or provided by government.
what is consumption
Using goods and services
what is consumer sovereignty
consumer is king
what is supply
amount of goods or services PRODUCERS are willing to MAKE and SELL at a given price
what is demand
amount of goods or services CONSUMERS are willing to BUY and USE at a given price
what is price
value of a good or service
what is competition
Rivalry between producers for consumers resulting in better quality goods and services at a lower price
what is profit
money earned by producers after all costs of producing a good or service has been paid
what is an economic system
An organized way in which a state or nation decides how much they’re gonna satisfy wants and needs
what is incentive
Something that motivates individuals to change economic behavior
what choices are made in production
what how and for whom to produce
what will influence producer choices
(Unlimited wants, limited resources) scarcity
what choices are made in consumption
what and how much to consume
what will influence consumer choices
price, preference
What is opportunity cost
What is given up when making a choice
how do producers respond when price changes
High price when selling more, low when selling less
How do consumers respond when price changes?
High price buy less, low price buy more
What determines price?
Supply and demand
what price should a product be
where supply and demand meets
what are the pros of proprietorship
Doesn’t have to share profit, can have own ideas
what are the cons of proprietorship
Takes all the risks, will be responsible to pay debts alone if it fails
what are the pros of partnership
Share risk and possible debt, more help with ideas and work
what are the cons of partnership
Share profits, one person leaves then others have to pay their debt
what are the pros of corporation
authorized by law to act as legal person regardless of # of owners, share risk with so many people, only lose what u invest cuz ur liability is limited to ur investments
what are the cons of corporation
Limited ownership so limited power, have to share profits with so many people
What are the 3 basic economic questions countries must answer?
What is being produced?
How will it be produced?
For whom will it be produced?
Free Market characteristics
Individuals & Businesses, Profit - earnings made after expenses have been paid, Private - Individuals & Businesses, Supply & Demand, Many different choices due to competition, Consumer is King, No gov
Command characteristics
Government, Providing for ALL citizens, Public - owned by gov, government, lack of choice, no consumer, economy is centrally planned 100% government
Mixed Characteristics
- Gov (Public) 2. Individuals & Businesses (Private), Private-Profit Public-Protecting and providing for Public, Private&Public ownership, competition and/or gov, many different choices due to competition, Consumer is King, Protect private property rights by enforcing contracts and consumers rights w/ public health and safety regulations
Traditional Characteristics
Decisions are based on customs and historical precedent (traditions). People often perform the same type of work as parents/grandparents, regardless of ability or potential.
what are the types of resources
natural, entrepreneurial capital human
most common economic system?
mixed
US economic system
mixed leaning free
What are the 5 characteristics of the US Economy?
Free Markets, Private Property, Consumer Sovereignty, Competition, Profit
