economic Flashcards
What is Laissez-faire?
An economic system where the government has minimal intervention in the economy.
Businesses are free to operate without government regulation.
Define Land in the context of Factors of Production.
Natural resources used to produce goods and services, including land, minerals, and water.
This encompasses all natural resources.
What does Labor refer to in Factors of Production?
Human effort used to produce goods and services, including both physical and mental labor.
Labor can be skilled or unskilled.
What is Capital in terms of Factors of Production?
Goods used to produce other goods and services, including tools, machinery, and buildings.
Capital is distinct from financial capital.
What does Entrepreneurship mean?
The ability to organize and manage resources to produce goods and services, including identifying opportunities, taking risks, and innovating.
Entrepreneurs play a key role in economic development.
What characterizes Developed countries?
Countries with high levels of economic development, high incomes, high levels of education, and strong infrastructure.
Examples include the United States and Germany.
Define Developing countries.
Countries with low levels of economic development, low incomes, low levels of education, and weak infrastructure.
Examples include many countries in Sub-Saharan Africa.
What is National Wealth?
The total value of a country’s assets, including land, buildings, and financial assets.
It is a measure of a country’s economic well-being.
What are Capital Goods?
Goods used to produce other goods and services, including tools, machinery, and buildings.
Capital goods are essential for economic growth.
What is a Demand curve?
A graph that shows the relationship between price and quantity demanded, typically sloping downward.
As price increases, quantity demanded decreases.
What causes a Shift in the demand curve?
A change in the demand curve caused by factors other than price, such as income, population, tastes, and expectations.
This can indicate changes in consumer behavior.
Define Inferior good.
A good whose demand decreases as income increases.
Consumers tend to buy more normal goods as their income rises.
What is a Sole proprietorship?
A business owned by one person, easy to start and operate but with unlimited liability.
The owner is personally liable for all business debts.
Define Partnership.
A business owned by two or more people, which can be general or limited partnerships.
In general partnerships, all partners are liable for debts.
What is a Corporation?
A business owned by shareholders, considered a separate legal entity from its owners.
Shareholders are not personally liable for corporate debts.
