Unit 1: Opportunity Cost + Comparative Advantage

Macroeconomics focuses on the ____ economy, whereas microeconomics focuses on the ____.

Entire, individual

What is the definition of scarcity?

The understanding that human desires are infinite but the resources needed are limited

What are inputs?

Factors of production

What are the four necessary parts for inputs?

Land, labor, a capital, and entrepreneurship

What are outputs?

Goods and services gained

The market system is also known as ____

Capitalism

What does “laissez-faire” mean, and which economic system is it associated with?

“Hands off;” refers to the market system, meaning the government should ideally have no involvement with the economy

What kind of property does the market system aim to protect?

Private property

What is the command system also knows as?

Communism

The ____ controls the entire economy in a communist society.

Government (central planning)

What two factors dictate the “traditional” system of economy?

Religion and customs