Unit 1 Flashcards
How do you define the basic economic problem?
Having an unlimited amount of needs and wants but having a limited amount of resources
What are the three types of economic SYSTEMS?
Command economy
Market economy
Traditional economy
What three questions do economists ask to classify a country as a particular economic system?
WHAT goods and services are reproduced?
HOW those goods and services are reproduced?
WHAT needs and wants are being satisfied?
What are the three types of economic RESOURCES?
Human
Natural
Capital
What does the three questions of economics all have in similar?
All involves goods and services
Example of HUMAN resources:
Engineer, plumber, teacher, nurse
Work to produce a good or service
Example of NATURAL resource:
Wood, natural gas, stone, oil
Used to make goods or services
What are examples of CAPITAL resources:
Office building, wrench, pots and pans
Goods produced and used to make other goods and services
THE FOUR PRINCIPLES OF THE US ECONOMIC SYSTEM:
Freedom of choice
Private property
Competition
Profit
Not having enough resources to satisfy every need:
Scarcity
The loss of potential gain from other alternatives when one alternative is chosen:
Opportunity cost
Things that you can see and touch:
Goods
Activities provided for the satisfaction of others that are consumed at the same time they are produced:
Services
Things that are required in order to live:
Needs
The things available to be used to produce goods and services:
Economic resources
