Foundations Of Economics Flashcards

1
Q

A person who’s starts their own business

A

Entrepreneur

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2
Q

Examples of factors of production

A

Land
Labor
Capital
Entrepreneur

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3
Q

Difference between shortage and scarcity

A

Shortage- quantity demand is greater than quantity at market place
Scarcity- unlimited human wants vs. limited resources

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4
Q

Economic concept of guns and butter

A

Guns- resources allocated to nations defense

Butter- resources allocated for consumer goods

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5
Q

Opportunity cost

A

Loss of potential gain when alternative is chosen

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6
Q

Trad off

A

Exchange of something of value

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7
Q

What is making a decision at the margin

A

Letting past go and look to future

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8
Q

What does production possibilities curve show

A

A graph that shows alternative ways to use economy’s productive resources

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9
Q

What is the law or increasing costs

A

Explains production possibilities curve

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10
Q

Why are all goods scarce

A

Resources are limited

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11
Q

What does decision making grid do

A

Helps make decisions in a range or context

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12
Q

Example or human capital

A

Education

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13
Q

Production possibility frontier

A

Economy at most efficient level

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14
Q

Why are free market economies able to attain economic growth

A

Competition allows for innovation and growth

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15
Q

What economy is the United States

A

Free market

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16
Q

Main incentive for manufacture to sell product

17
Q

Characteristics of centrally planned economy

A

Government has authority, makes economic decisions

18
Q

Traditional economy

A

Roles and economic decisions defined by customs

19
Q

When government provides safety net which economic goal is met

A

Bad conditions; natural disasters, injuries or job loses

20
Q

3 basic economic questions

A

What to produce?
How to produce?
Who to produce for?

21
Q

What do people supply on return for factor payments

A

Land
Labor
Entrepreneurship

22
Q

Who created “invisible hand”

A

Adam Smith

23
Q

What does specialization do for economy

A

Improves productivity

24
Q

Economic goal concerned with using resources wisely and reduce waste

A

Economic efficiency, provide people with minimum standard and quality life

25
Working where you want is an example of what economic goal
Economic freedom
26
Innovation leads to what economic goal
Economic growth
27
Difference between command & market economy
Command- central authority determines basic functions/ production Market economy- producers/ consumers determine production