Economics

Scarcity

The condition that results from society not having enough resources

Economics

A social science that focuses on the production, distribution, and consumption of goods and services

Need

Basic requirement for survival

Want

Something you’d like to have

Factors of production

Resources required to produce the things we like to have

Land

Natural resources

Capital

Factor of production

Capital good

The tools, equipment, machinery, and factories used in productions

Labor

People with all their effort, ability, and skills

Entrepreneur

A risk taker in search of profit who does something new with resources

Gross domestic product

The dollar value of all final goods, services, and structures produced within in country’s borders in a 12-month period

What are the four key elements to study of economics

Scarcity, supply and demand, costs and benefits, and incentives

Three basic questions on how resources are used

What, how, and who

What are the 5 key elements of the study of economics

Description, gross domestic product, analysis, explanation, and prediction

Difference between worker’s wages from 1978-2010

48,000-33,000

Top 1% of workers wages from 1978-2010

393,000-1,101,000

What percentage of spending in the us is consumer?

70%

What are economic products?

Goods and services that are useful, relatively scarce, and transferable to others. They satisfy our wants and needs.

What is a good?

A useful tangible item

What is a service?

Work preformed for someone

What is a consumer

The people who use goods and services to satisfy their wants and needs

What is the paradox of value

Some necessities have low monetary value while others non-neccessities have high monetary value.

What is utility?

The capacity to be useful and provide satisfaction

What is wealth?

The accumulation of products that are tangible, scarce, useful, and transferable from one person to another.

What is a market?

A location or other mechanism that allows buyers and sellers to exchange a specific product

What is the circular flow of economic activity?

A diagram showing the high degree of economic interdependence in our economy

When does economic growth occur?

When a nation’s total output of goods and services increases over time.

What is economic interdepedence?

We rely on others, and others rely on us.

What is a trade off?

Alternative choices

What is opportunity cost?

The cost of the next best alternative

What is the production possibilities curve?

A diagram representing various combinations of goods and services an economy can provide when all its resources are in use

What is the economic model?

A simplified equation, graph, or figure showing how something works

What is cost-benefit analysis?

A way of comparing the costs of an action to the benefits received

What is free enterprise economy?

One in which consumers and privately owned businesses rather than gov make the majority of what, how, and for whom

What is the standard of living?

The quality of life based on the ownership of the neccessities and luxuries that make life easier

What is an economic system?

An organized way of providing for the wants and needs of their people

What is a traditional economy?

System in which the allocation of scarce resources and other economic activities are based on ritual, habit, or costum

What is a command economy?

System with a central authority that makes the major economic decisions

What is a market economy?

Economic system in which supply, demand, and the price of system help people make economic decisions and allocate resources

What is capitalism?

System in which private citizens own and use the factors of production in order to generate profits

What is a mixed economy?

System that has some combination of traditional, command, and market economy.

What is socialism?

Political and economic system in which the gov owns and controls some factors of production

What is communism?

Economic and political system in which all factors of production are collectively owned and controlled by the state.