Unit 6 Quiz Part 1 Flashcards
What is an economic system?
The way society organizes the production, distribution, and consumption of goods and services
What is scarcity?
The idea that land and materials limit what people need
What factor create scarcity?
Land, labor, capital
Explain how land affects scarcity
Land consists of all the materials found in the natural environment needed to produce goods and services, such as renewable and non-renewable resources
Explain how labor affects scarcity
Labour consists of the physical and mental effort needed to produce good and services
Explain how capital affects scarcity
Consists of the money people own or borrow, used to purchase equipment, tools, and other resources to produce goods and services
What are the three types of economies?
Planned economy, Mixed economy, Market Economy
Which type of economy has more government involvement?
Planned economy
Which type of economy has less government involvement?
Market Economy
What does shift left mean?
More government involvement
What does shift right mean?
Less government involvement
Describe a planned economy
- Government makes all decisions about how to solve scarcity
- Government owns and manages the resources to produce things
- Plans what will be produced and how to use limited resources
Characteristics of a planned economy
- Resources are publically owned
- Government makes decisions on how to use resources
- Individual consumers have little influence on economics
Describe a mixed economy
- Combines private ownership and government ownership
- Government owns some and private companies own some
- Level of government fluctuates depending on what party is in power
Characteristics of a mixed economy
- Some resources are publicly owned and some are privately owned.
- Individuals and government both make decisions about what to produce.
- Individual consumers an government influence economic decision making.