Econ Vocab Flashcards
Win
Command Economy
An economic system in which the government controls a country’s economy
Economics
The study of scarcity and choice
Economic System
The methods societies use to produce and distribute resources
Entrepreneur
A person who starts up and takes on the risk of a business
Factors of Production
Land, labor, and capital; the three groups of resources that are used to make all goods and services
Free Market Economy
An economic capital in which resources are primary owned and controlled by the private sector
Human Resources
People who work to produce goods and services
Marginal Benefit
The additional benefit associated with an action
Marginal Cost
The cost added by producing one additional unit of a product or service
Inputs
The specific economic resources used in producing foods and services
Invisible Hand
Phrase coined bu Adam Smith to refer to self-regulating nature of a free marketplace
Mixed Economy
Market-based economic system with limited government involvement
Natural Resources
Raw materials form nature that are used to produce goods
Needs
Basic requirements for human survival
Negative Incentive
A penalty that dicourages a behavior
Opportunity Cost
The most desirable alternative given up as the result of a decision
Outputs
The products and/or services that an organization produces
Physical Capital
The human-made objects used to create other goods and services
Positive Incentive
A reward or other enticement that encourages a behavior
Production Possibilities Frontier
The line on a production possibilities graph that shows the maximum possible output
Productivity
The value of a particular product compared to the amount of labor needed to make it
Scarcity
The limited nature of society’s resources
Specialization
The development of skills in a specific kind of work; division of labor
Traditional Economy
An economy consisting of mostly subsistence Agriculture
Voluntary Exchange
The principle that people may decide what, when, and how they want to buy and sell
Wants
Desires that can be satisfied by consuming a good or service
