Economics Unit 1

scarcity

lack of resources

economics

using limited resources to fill nearly unlimited wants/needs

goods

items that can be bought, sold, transported, and produced

service

work performed for someone

means of production

capital, land, labor

examples of capital

machines, building, equipment, etc.

examples of land

where your business is, natural resources

examples of labor

human capitol

GDP

the total money value of all finished goods and services made inside a country during a specific time

opportunity cost

2nd choice when making decisions

market

system/place buyers and sellers exchange goods and services

consumer

person who buys/uses goods and services

supplier/producer

person/business who provides

traditional economy

helping everybody, set/define roles, small

quality of life is lower, lack of growth

command economy

central government owns means of production

things are cheaper or free

lack of freedom to choose, leaders can be corrupt, low quality goods

market economy

supply & demand to make decisions

competition, priv ownership, encourages growth

doesn’t provide for everyone, economic uncertainty

communism

gov controls resources and property

socialism

gov owns most, private ownership can exist

profit

money after business subtracts revenue cost

regulation

gov rules everyone has to follow

consumer rights

right to safety - products cant damage consumer

right to be informed - consumer gets adequate info abt product

right to be choose

right to redress - can be compensated/fixed

importance of economic growth

econ growth → more jobs → more income → higher living standard

how does division of labor improve productivity?

faster & better at jobs, conveyor belt starter

why gov in free market?

protect consumers & workers, prevent fraud

what are the U.S goals?

growth, employment, price stability, equity, freedom

circular flow model