Final Part 1 Flashcards
Economics:
Science on how individuals use their limited resources to satisfy their unlimited wants
What are the 4 basic needs?
Food
Water
Shelter
Oxygen
What are four factors of production?
- Labor: human effort
- Land: Natural resources
- Technology/ Entrepreneurship: Ideas for new businesses
- Capital: How to make more money with what you have
• The number one (main) problem with Economics:
scarcity- there is not enough for everyone
Trade off: ex.
an exchange of something for another something (Ex. Money for food, working before college.)
Opportunity Cost: ex.
The value of the best next alternative (ex. Opportunity cost of school is sleep, gas.) What every you give up to choose what you’re choosing
Microeconomics:
deals with the decision making of small firms and individuals
Macroeconomics:
deals with the decision making of larger corporations
economic system:
The way a society carry out their finances
What are the four types of economy?
traditional
command
market
mixed
Three questions that every economic system should ask themselves.
- What should be produced?
- How to make it?
- For who?
Traditional system: ex.
Economic decisions that follow the tradition, customs, and beliefs. (Ex. father was a fisherman you will become a fisher man)
Command economy:
System in which government controls the factors of production. The government gets whatever they want.
What two states in America practice some form of traditional economy?
Alaska (fishing)
Hawaii
What are three countries that practice command economy?
Laos
North Korea
Cuba
