Economics Flashcards
The economic condition of having virtually unlimited wants but have limited resources
scarcity
what is scarcity’s relationship to economics
economics is how people figure out how to satisfy the needs scarcity creates
What are the three questions all economic systems answer?
who
how
what
-Determining the additional benefits of an activity are valuable enough to risk the additional costs of the activity
-unitary costs per each additional unit of change
firms and individuals will use this strategy to maximize profits
marginal analysis
what are the 5 economic goals
efficiency freedom security equity growth
What’s the link between scarcity and opportunity cost?
Opportunity cost happens when there’s a limit/scarcity on items so you have to choose one
With __, at zero price, there is not enough for everyone to have all they want.
scarcity
___________ are price determined, scarcity always exists
shortages
another word used to describe market economies is _______
capitalism
when you weigh the additional cost, or____________ v. the additional benefit of ______________, of an action, you are thinking on the margin
marginal cost
marginal benefit
To be efficient you must deliver the right _____- to the right ________ for the right _________-
goods, people, cost
_________— is the cost of the next best alternative that could have been chosen
opportunity cost
The production possibility frontier curve is a curve depicting all ___________ output possibilities for two or more goods given a set of inputs (resources, labor, etc.) It is assumed that on the curve all possible _______ have been expended
maximum
resources
A type of command economy ____- is characterized by government control of a factors of production and authoritarian government
communism
according to Adam Smith the “invisible hand” self- interest ______ motivates actions in a free market economy and _________- regulates in a free market economy
motivates
competition
What are the factors of production (CELL)
Capital
Entrepreneur
Land
Labor
who controls them in a free market
the people or buyers or sellers
name four types of economies
free
traditional
command
mixed
Why do individual actors in the free market look to specialize in one or a few specific activities? Which economic goal does this relate most to?
Specialize so they can use their time efficiently and improve the product.
economic efficiency
Incentives and competition affect the market place
Business owners competing for customers to get more money so they lower their prices and have sales to draw customers in
