Intro to Econ Flashcards
Natural Resources
all of the “gifts of nature” that make production possible
examples: water, timber, oil
Labor aka Human Resources
physical and mental efforts that people contribute to the production of goods and services
examples: mental and physical exertion
Capital/Capital Goods
tools, machinery, and goods used to make other things
examples: money and equipment
Entrepreneurs
individuals who start new businesses, introduce new products, and improve management techniques
Factor Market
resources that businesses use to purchase, rent, or hire what they need in order to produce goods or services. Those needs are the factors of production, which include raw materials, land, labor, and capital.
Command Economy
a centralized government controls the means of production and determines output levels.
Command economies stand in contrast to free-market economies, those in which the law of supply and demand determines output and prices.
Product Market
something that is referred to when pitching a new product to the general public.
Product market definition focuses on a narrow statement: the product type, customer needs (functional needs), customer type, and geographic area.
Demand
an economic principle referring to a consumer’s desire to purchase goods and services and willingness to pay a price for a specific good or service.
Substitutes
a product or service that consumers see as essentially the same or similar-enough to another product.
Specialization
the process of an organization concentrating its labor and resources on a certain type of production to be more efficient and create a comparative advantage for an economy.
Mixed Economy
consists of both private and government/state-owned entities that share control of owning, making, selling, and exchanging good in the country.
definition of economics
branch of knowledge concerned with the production, consumption, and transfer of wealth
examples and definition of inelastic goods
Inelastic means that when the price goes up, consumers’ buying habits stay about the same, and when the price goes down, consumers’ buying habits also remain unchanged.
Ex:
goods that need a lot of money to increase production like oil.
What occurs when consumers are willing to pay more money for a product?
A consumer surplus occurs when the consumer is willing to pay more for a given product than the current market price. Many producers are influenced by consumer surplus when they set their prices.
What are durable goods?
goods not for immediate consumption and able to be kept for a period of time.
automobiles, furniture, household appliances, and mobile homes
What are government subsidies? How do they impact supply?
A subsidy is a direct or indirect payment to individuals or firms, usually in the form of a cash payment from the government or a targeted tax cut
increases the overall supply of that good or service
What are complementary goods?
a product or service that adds value to another. In other words, they are two goods that the consumer uses together. For example, cereal and milk, or a DVD and a DVD player.
Define demand and explain what impacts demand in economics.
As demand increases, the available supply also decreases.
The demand for a good depends on several factors, such as price of the good, perceived quality, advertising, income, confidence of consumers and changes in taste and fashion.
Define economic trade offs and provide an example.
the term trade-off is often expressed as opportunity cost. A trade-off involves a sacrifice that must be made to obtain a desired product or experience.
Why are price ceilings placed on products?
the mandated maximum amount a seller is allowed to charge for a product or service—be it housing, prescription drugs, or auto insurance. It keeps things affordable and prevents price-gouging or producers/suppliers from taking unfair advantage of them.
What type of economic system does the United States currently have?
The U.S. is a mixed economy, exhibiting characteristics of both capitalism and socialism.
What is the difference between price ceilings and price floors?
A price ceiling keeps a price from rising above a certain level (the “ceiling”), while a price floor keeps a price from falling below a given level (the “floor”).
How is specialization used in economics?
Specialization in business involves focusing on one product or a limited scope of products so as to become more efficient. Specialization can increase productivity and provide a comparative advantage for a firm or economy.
What is productivity? How can an employer increase productivity?
how much work is accomplished in a particular work environment, over a particular period of time.
encourage and invest in training and motivation. specialization. when focusing on one thing it makes it easier to focus on j one thing. division of labor
