The Economist's Toolbox for Analyzing Economic Systems

These flashcards cover key vocabulary terms and concepts from the lecture on economics, focusing on scarcity, costs, and economic systems.

Scarcity

A fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Opportunity Cost

The value of the best alternative foregone when making a decision.

Command Economy

An economic system where a centralized authority makes decisions about production and distribution of goods and services.

Market Economy

An economic system where individual decisions determine production and distribution of goods and services.

Trade-offs

The concept that in order to gain something, something else must be given up.

Cost

In economics, the total value of what is forgone when choosing one option over another.

Economics

The study of how people use limited resources to satisfy unlimited wants.

Hybrid Economies

Economic systems that incorporate elements of both command and market economies.

Division of Labor

The assignment of different parts of a manufacturing process or task to different people in order to improve efficiency.

Adam Smith

An economist known for his work on free markets and the implications of industrialization.