Economies Flashcards
The Concept Of Scarcity
Scarcity is the problem of having unlimited wants and needs but limited resources, which requires individuals and societies to make efficient choices about resource allocation.
Nature Resource
Input from nature, such as water, forests, or fertile land, used in the production of goods and services
Labour Resource
A persons intellectual or physical skills needed to produce a good or service.
Capital Resource
input from manufactured goods, such as machines or computers, that is used to produce as good or service
Opportunity Cost
The value of the next best alternative use of resources
What Are Economic Systems
Economic systems refer to the way a society organizes the production, distribution, and consumption of goods and services.
Define the Difference between Needs and Wants
Needs are essential requirements for survival, while wants are desires that are not necessary for survival but enhance quality of life.
Globalisation
The increasing interconnectedness of the countries around the world
Traditional / subsistence Economies
an economic system in which people produce enough for their own needs through methods such as hunting, gathering and farming: money is not used
Planned Economies
an economic and political system where the government or state predominantly owns the resources and decides what goods and services to produce, how to produce them and who they will be distributed to.
Mixed Economies
Capitalist - leans towards a market economy (production privately owned by individuals)
Socialist - leans towards a planned economy (production owned by goverment)
Market Economy
an economic system in which private individuals exchange goods and services with consumers in a free market and, in return, keep the profit.
Profit
The amount of money a business earns after taking away its expenses
Exchange Rate
The amount of one currency that can be exchanged for another at a particular point in time
what are the three economic questions that all economies must answer?
What goods and services should be produced?
How should these goods and services be produced?
Who consumes these goods and services?
