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Production Possibilities Model
a graph that shows the maximum production outcome of goods and services
Economic System
how a society uses its goods and services in an organized way.
ex: United States economy
Factors of Production
resources that are needed for production for goods and services
ex: land, labor, capital
Utility
the value or satisfaction that people get from consuming goods and services and engaging in activities
ex: park, playground, basketball court
Capital
the resource that’s being used in a factor of production
Market Capitalist Economy
resources are mostly owned by private individuals, who make decisions about how to use them.
ex: small business or stock market
Command Socialist Economy
the government owns most of the capital and natural resources and controls how they are used.
ex: North Korea, Cuba
Production Possibilities Curve
a graph that shows the goods an economy is capable of producing
Labor
the human effort, including physical and mental work, that is used in the production of goods and services.
Human Capital
The skills, knowledge, and experience a worker gains through education, training, or experience that contribute to their productivity
Financial Capital
money or stocks/bonds that will be invested in or funded for production of goods and services
Natural Resources
found in nature without any human alteration.
can be used in the production of goods and services.
Comparative Advantage
if an economy can make a good or service at a lower cost than others
