Studied by 3 people
economy
A system by which goods and services are produced and distributed
goods
Items purchased to satisfy needs and wants
services
Actions or activities that one person performs for another
consumer
A person who purchases goods and services for personal use
Producer
A person, company, or country that makes, grows, or supplies goods or commodities for sale
natural resource
Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain
human resource
a person and the skills and knowledge he or she brings to a job
capital resource
a tool, machine, or building that people use to produce goods and services
scarcity
Limited quantities of resources to meet unlimited wants
supply
The amount of goods available
demand
Consumer willingness and ability to buy products
profit
The financial gain made in a transaction
economist
a person who studies the economy
Traditional Economy
An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.
command economy
An economic system in which the government controls a country's economy.
market economy
Economic decisions are made by individuals or the open market.
Mercantilism
An economic policy under which nations sought to increase their wealth and power by obtaining large amounts of gold and silver and by selling more goods than they bought
smuggling
The act of illegally importing or exporting goods
commerce
the buying and selling of goods and services
What are the two different levels of economies?
Macro and micro
Natural
resources found in nature
human
resources provided by people in the goal of providing a service
capital
any tool used to provide a resource or good/service
in economic choices, what are the two outcomes called?
Opportunity cost and opportunity benefit
What do the two outcomes of economic choices mean?
Opportunity cost is what you miss out on by choosing and can be good or bad, opportunity benefit is what you get by choosing
How do supply and demand curves shift when prices change?
They either shift left or right depending on if the price goes up or down
demand goes up, supply stays the same
prices goes up
demand goes down, supply stays the same
price goes down
demand stays the same, supply goes up
price goes down
demand stays the same, supply goes down
price goes up
What is a surplus and a shortage?
surplus → supply is greater than demand shortage → demand is greater than supply
Be able to read an economic model and determine surplus vs shortage. How do you tell?
Read the model to determine where quantity is greater (supply or demand). If it is the top gap of the "X", then its a surplus, if it is the bottom gap of the "X", then it is a shortage
How do you calculate how much a surplus is using an economic model or table? (Hint: remember IXL)
Subtract the quantity demand from the quantity supply (supply is greater than demand)
How do you calculate how much a shortage is using an economic model or table? (Hint: remember IXL)
Subtract the quantity supply from the quantity demand (demand is greater than the supply)
What are the four basic economic questions?
What will be produced? How will it be produced? For whom will it be produced? How much will it be produced?
What are the three types of economies and what are the difference between the 3?
~Traditional economy → based on religion, customs, and beliefs. Bartering occurs and based on agriculture ~Command economy → government answers basic economic questions for citizens ~Market economy → individual citizens answer the basic economic questions
Note 
Flashcard (30)