What Is Econ Flashcards
What is Economics
Study of scarcity and choice. Study of how man allocates his scarce resources
What is scarcity
The lack of a good or service
What is choice and why does it exist
Choice is a decision that has to be made between two or more options.
Choice exists because of scarcity
What is opportunity cost
Opportunity cost is the cost of the next best alternative being forgone.
I.e what has been lost to obtain something else
What is am economy
An economy refers to the way a country manages its resources
Types of economy
Free market
Command
Mixed
Traditional
Free market?
A free market is where resources are allocated through price mechanisms
The market decides what sells and what doesn’t .
Command economy
Resources allocated/controlled by the gov
Mixed Market
Resources are allocated by a public sector, usually the government and a private 6 non-government owned business
