GEOG 216 Reading two

Question 1

What is an economy?

Answer 1

• An economic system is scale independent
• Touches on the questions: how, who and what?
• The economic problem: scarcity  trade-offs  choice
• Production possibilities frontier (PPF)
- Trade-offs
- Valuation
- Preferences
- Growth
- Opportunity cost

Question 2

Economic agent

Answer 2

anyone who makes decisions about production and consumption

Question 3

Economic institutions

Answer 3

a set of norms and rules that governs commerce, trade, production and consumption

Question 4

Factors of production

Answer 4

land, labour, capital

Question 5

Goods and services, what types exist?

Answer 5

private versus public goods

• Excludability: keep the product for yourself  more for you
• Rivalry: someone takes in from you  less for you

Question 6

What type of scarcity are there?

Answer 6

• Natural: oil, minerals

- Socially constructed: social norms and institutions will exclude people even if the resource is abundant (ex. Land)

Question 7

What are Markets and what’s their primary role?

Answer 7

institutions, types of markets, persistence, efficiency (productive: producing at lowest price possible, allocative: the goods and services reach those who need them the most.

• Primary role of markets: allocate scare resources efficiently
• Labour markets need a ground of wealth

Question 8

Traditional economy

Answer 8

developing regions

Question 9

Market economy

Answer 9

western world, capitalism, limited role of the gov., profit maximization.

Question 10

Command economy

Answer 10

communism, strong gov. control.

Question 11

Mixed economy

Answer 11

combo of market and command economy

Question 12

Political economy

Answer 12

looking at the norms of commerce and how they affect politics