WEEK. 4 - SCARCITY, ECONOMIC PROBLEMS AND ECONOMIC SYSTEM

Needs

the essentials of life, such as food and shelter

Wants

desires for non-essential items

Economic Problem

the problem of having unlimited wants, but limited resources to satisfy them

Scarcity

the limited nature of resources, which underlies the basic economic problem

Economic Resources

basic items that are used in all types of production, including natural, capital, and human

resources

Natural Resources

the resources from nature that are used in production, including land, raw materials,

and natural process

Capital Resources

the processed materials, equipment, and buildings used in production; also known as capital

Human Resources

the efforts of people involved in production, including labour and entrepreneurship

Capital goods

are goods used to produce other goods and services.

Consumer goods

are goods produced for present consumption.

Economic Systems

is a means by which societies or governments organize and distribute available resources, services, and goods across a geographic region or country.

Traditional Economic System

is based on goods, services, and work, all of which follow certain established trends.

Command Economy

the government determines what goods to produce. The government also decides how much to produce and at what price.

Market Econimic System

• economic system in which economic decisions and the pricing of goods and services are guided by the interactions of a country's individual citizens and businesses.

• It is also called free enterprise or laissez – faire (to let do) economy

Consumer sovereignty

is the idea that consumers ultimately dictate what will be produced (or not produced) by choosing what to purchase (and what

not to purchase).

Free enterprise

under a free market system, individual producers must figure out how to plan, organize, and coordinate the production of products and services.

Mixed Economic System

is a combination of different types of economic systems. This economic system is a cross between a market economy and command economy

Economic Freedom

The goal is about the amount of choice people have in where they work and live, the type of career they have, what they do whit their income and what they buy or sell.

Economic Equity

is defined as the fairness and distribution of economic wealth, tax liability, resources, and assets in a society.

Horizontal equity

is an economic theory that states that individuals with similar income and assets should pay the same amount in taxes.

Vertical equity

is a method of collecting income tax in which the taxes paid increase with the amount of earned income.

Economic efficiency

The quality of economic activity in which resources are used and goods distributed in a way that generates the greatest benefits to producers and consumer

Economic Growth

is an increase in the production of goods and services in an economy.

Economic stability 

allows people the ability to access resources essential to life, including financial resources, quality housing and food, and a job that provides a stable, living wage