Unit 1 (Basic Economic Concepts) Flashcards
What is scarcity?
The idea that we have unlimited wants and needs, but we have limited resources.
What are resources?
Factors of production
Is money a resource? Why or why not?
Money is NOT a resource because it can be used to produce other things.
What are the factors of production?
land, labor, and capital. (the natural resources, human workers, and machines that produce goods and services.)
What is macroeconomics?
Focuses on the entire economy (unemployment, inflation, government policies, and international trade.)
What is microeconomics?
Focuses on markets, businesses, and individuals (products markets, labor markets, maximizing profit, and finding the most efficient way to use our scarce resources.)
What is communism in economics?
The government controls economic activity. The government tells the producers what to produce.
What is capitalism in economics?
Economic activity is controlled by BOTH the central planners and the producers.
What is opportunity cost?
The next best thing that could have been chosen, but was given up, when making a decision. WHAT YOU ARE LOOSING
If you decrease unemployment, what will happen to the PPC?
Decreasing unemployment will result in a point within the curve moving onto the curve
What is the long term result of having more capital goods?
Greater future economic growth.
If there is an increase in consumer demand, what will the PPC look like?
If there is consumer demand, the points will move ALONG the ppc toward the desired good. (Draw arrows on the curve toward the good that is most desirable.)
What does the PPC show?
What we CAN produce. NOT what we want to produce.
What is one key point about free market economies?
They promote private ownership of resources.
