Intro to econ test 1 Flashcards
Economics
How people satisfy their needs and wants by making choices
Scarcity
How much or how little something is made
Goods
Physical objects like shirts and shoes
Services
Actions that one person performs for another
Three factors of production
Land, labor, and capital
Entrepreneur
Person that starts their own business
Opportunity cost
The best thing given up by making a certain decision
Economic system
Method used to produce and distribute goods and services
Patriotism
Love of your country
Standard of living
Level of economic success
Traditional economy
Uses customs decide how to produce and consume goods and services
Market economy
Free exchange to decide how to produce and consume goods and services
Command economy
Government decides how to produce and consume goods and services
Mixed economy
Market economy with government involvement
Communism
Uses command economy, everyone makes the same money
Capitalism
Uses the market economy, money is based on competition
Least developed nation
Nation concerned with food, sanitation, disease, and a growing population
Developing nation
Nation with workforce, better sanitation, and life expectancies
Developed nation
Technological, healthcare, diverse economy, and a steady population
Free enterprise
Individuals make economic choices and start businesses in a free-market
JD Rockefeller
Around 1900, he started standard oil, the largest oil company in history
Andrew Carnegie
Around 1900, he started US steel and became the richest person in US history
Bill Gates
Started Microsoft and became a billionaire
Profit motive
Force that makes people and organizations improve
Open opportunity
Anyone can compete in the free-market
Voluntary exchange
People can decide what they want to buy
Macroeconomics
The study of entire economies
Microeconomics
Study small economic units, like families or businesses
Gross domestic product(GDP)
Value of goods and services in economies
Four phases of the business cycle
One – general prosperity: economy growing up
Two – boom period: Economic activity at its peak
Three – economy starting to slow down
Four – recession
Public sector
Involves the government
Private sector
Involves individuals and businesses
Welfare
Government aid to the poor
What level of government is responsible for welfare programs?
Federal
Social Security
Money from the government to every American over 65
Medicare
Government health insurance to people over 62
Medicaid
Government health insurance to lower income people
