Vocabulary: Unit One Flashcards
Economics
A social science that examines human choices in the face of scarcity
Microeconomics
The study of the behavior of individual people, businesses, and markets
Macroeconomics
The study of economy: wide trends created by large groups of individuals acting independently
Scarcity
Not enough resources to satisfy people’s unlimited wants
Free goods
Goods that are not scarce
Resources
Also called factors of production; includes land, labor, capital; inputs of production
Goods and services
Outputs of production
Market
Where buyers and sellers exchange goods and services
Factor market
Factors of production are bought and sold
Product market
Goods and services are bought and sold
Command economy
Resources and means of production are publicly owned; government officials make economic decisions
Traditional economy
Decisions based on custom or religion
Market economy
Economic decisions made and prices determined by the interactions of many people; including consumers, producers, business owners, and investors
Market forces
Interactions between many people in a market
The invisible hand
Individuals act in their own self-interest, resulting in the greatest benefit for the most people as though by direction
