Social Flashcards Set

Scarcity

The state of being scarce or in short supply.

Factors of Production

The resources used in the production of goods and services, including land, labor, and capital.

Land (in economics)

Natural resources (water, minerals, forests, land itself) used in production. Payment = Rent.

Labor

Human effort (physical and mental skills) used in production. Payment = Wages/Salaries.

Capital (in economics)

Human-made resources used in production (machinery, tools, buildings). Payment = Interest.

What are the 4 Economic Questions?

What to produce? How to produce? For whom to produce? How to accommodate change?

Economy

The wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.

Free Market Economy

An economy where consumers make purchasing decisions based on self-interest and company owners act in their self-interest.

Economic Freedom

The central value behind a market economy that gives individuals the right to own property and make economic choices.

Capitalism

An economic and political system in which a country's trade and industry are controlled by private owners for profit.

Supply and Demand

The two forces that affect prices in a market economy.

Monopoly

A situation where one company controls the entire market for a product or service without significant competition.

Benefits of Monopolies

Economies of Scale, potential for innovation, and stability of prices.

Drawbacks of Monopolies

Higher prices, reduced output, lower quality, less innovation, potential inefficiency.

Government role in Free Market

The government may intervene in the market through regulation, policies to promote competition, and consumer protection.