Unit 1: Foundations of Economics: Three Economic Questions
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These flashcards cover the primary concepts related to the Three Economic Questions in economics, including key terms like scarcity, specialization, and productivity.
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8 Terms
Three Economic Questions
What should be produced? 2. How should it be produced? 3. For whom should it be produced?
Scarcity
The limited nature of society's resources, making it impossible to fulfill all wants and needs.
Specialization
The concept that a nation should produce and export a limited assortment of goods for which it is particularly suited to use its resources efficiently.
Factors of Production
The inputs used to create goods and services, which include land, labor, capital, and entrepreneurship.
Productivity
A measure of the efficiency of production, often improved through specialization and technology.
Natural resources
Raw materials available in a country that can determine what goods are produced, such as soil and climate.
Trade-offs
The choices made when comparing the benefits of one action against the costs of another in the production process.
Economic System
The system that determines how goods and services are produced and distributed among members of society.
