econ test

economics

science of scarcity

human resources

brain or muscle power of human beings

capital resources

any resources that are made by humans and used to create other goods and services

natural resources

starting point of all production (oil, vegetation, water, etc.)

good ands services

products

goods and services necessary for survival

needs

consumer goods

finished products meant for immediate consumption

capital goods

machinery, equipment, buildings,, vehicles

free market philosopher

adam smith

factors of production

The resources used to make all goods and services

trade off

all the options available when making a decision

opportunity cost

best available alternative(2nd choice)

what does a production possibility frontier show

the maximum amount an economy can produce

law of constant cost (equally substitutable)

Straight line

law of increasing (opportunity cost)

curved line

% of economy at full employment

5%

model economy where individuals make all the decisions

market economy

economy that combines elements of pure market and pure command

Mixed economy

economic system where government controls all aspects

Command economy

Authoritarian socialism; government controls most factors of production

Communism

the way governments answer three basic economic questions determine

style of government

Business can be conducted w limited government intervention

Free enterprise system

Karl marx's term for workers in capitalistic society

Proletariat

Marx's term for capitalistic owners

Bourgeoisie

struggle among various producers for consumers business

Competition

Condition people would be least likely to expect safety of government for

Low income

Why do markets exist

They allow people to consume and sell specialized goods and services they produce