Unit 1! Econ Flashcards
What is Economics?
The study of how people satisfy their needs and wants.
Money/ bartering
What is the difference between goods and services? List some of each.
Goods are physical objects such as:
Computers
Sneakers
Cars
Services are actions that a person performs for another person.
Teaching
Cleaning
Fixing my car
What is the difference between wants and needs? List some of each.
Needs are the things that a person has to have to survive.
Food
Water
Shelter
Wants are those things that you would like, but do not need to survive.
Ex. Car
I-Pad
Concert Tickets
What is Scarcity? Why do we have scarcity?
Def. A limited amount of resources to meet unlimited wants and needs.
We have Unlimited Wants and Needs But Limited Resources Create Scarcity. So we need to make Choices
What to produce, How to Produce, For Whom to produce
What is a traditional economy?
Economic questions are answered by habits and customs (the way it has always been done)
Children work the same jobs parents worked, often farming or hunter/gatherer
Fear Change!
Ex. Eskimos, the Amish
What is a command economy?
The government answers the basic economic questions
Ex. Communist Countries (China, Vietnam, North Korea, former
Soviet Union, Cuba)
What is a market economy?
Economic questions are answered by individual buyers and sellers.
Supply and demand influence economy.
People act out of self interest; motive for profit (money) drives the economy
Also known as FREE ENTERPRISE or CAPITALISM**
Ex. The United States, Western
Europe, Japan
What is a mixed economy?
No economy is pure market, pure command or pure traditional, elements of each appear in all economies, some have more elements of one economy than another.
What kind of economy is the United States currently?
The United States is mostly a free market economy, it does have elements of a command economy.
Give an example of the U.S. as a market economy.
Economic Freedom: individuals have the right to choose
Give an example of the U.S. as a command economy.
Government regulation of some business practices
Ex. Wages, labor hours,
safety practice.
How is competition beneficial (good) to consumers (us)?
Competition: more than one producer of good/services insures choice
What are trade offs?
When you choose between two possible uses for a resource, giving up one alternative for another.
What are opportunity costs?
The value of time, money, goods, and services given up in an economic choice. The #1 alternative is the Opportunity cost.
What are Human Resources? Give an example.
A person’s knowledge, skills, attitudes and abilities determine that individual’s value as a human resource. The more rare the skill, knowledge etc. the more valuable and higher pay.
Ex. Unskilled workers- low pay
Teachers- high level of education, higher pay
Doctors- a lot of education and rare skills, well paid
NFL quarterbacks- rare physical abilities, very well paid
