Economics Class...
Chapter One Vocabulary:
To use the Quizlet flashcards for Chapter One please click here. The vocabulary for the first chapter is included below.
Scarcity: Idea that all of our resources are limited.
Economics: The study of how people satisfy their seemingly unlimited wants with the use of scarce resources.
Opportunity Cost: The value of the one next best alternative when you make a decision.
Trade-Offs: All of the other alternatives when a decision is made.
Factors of Production: The land, labor, capital, entrepreneurs, technology used to make products.
Land (Natural Resource): Gifts of nature.
Labor (Human Resource): People with their efforts and skills.
Capital (Capital Resource): Man made things.
Entrepreneurs: Risk takers who introduce new products or start new businesses.
Technology: The use of science to develop new products.
Consumer Goods: Products for individual use.
Capital Goods: Only factories, equipment, machines and tools used by businesses to make consumer goods.
Fundamental Economic Questions: What to produce? How to produce? For whom to produce it for?
Economic System: How a country is set up to answer the fundamental economic questions.
Real costs: The actual materials used to make something.
Production Possibilities Curves (PPC): Shows how much a business can produce of two products if they are efficient.
Resource: Anything that can be used.
Productive Resource: Anything that can be used to make something else.
Specialization: Where a business is only making one kind of product.
Chapter Two Vocabulary:
Resource: Anything that can be used.
Productive Resource: Anything that can be used to make something else.
Specialization: Where a business is only making one kind of product.
Chapter Two Vocabulary:
Three Governments…
Democracy: Everyone
is equal.
Oligarchy: Small group is in
charge.
Dictatorship: One person is in
charge.
Economic Systems...
Market: Producers and consumers
make economic decisions
Command: Government makes economic
decisions.
Traditional: Ancestors made
economic decisions.
Subsistence: Individuals make
economic decisions for themselves.
Political Economic Systems...
1) Capitalism= Market + Democracy
2) Mixed Free Enterprise= Market +
Democracy + Slight Command (Example: USA)
3) Socialism= Market + Command +
Democracy or Oligarchy (Example: England, Germany)
4) Fascism=Command + Slight Market +
Dictatorship (Example: Nazi Germany)
5) Communism=Command + Oligarchy
(Example: Cuba)
Six Characteristics of a Market Economy...
1)Free Exchange: Freedom to buy & sell.
2)Private Ownership: Freedom to own what
you want.
3)Self-Interest: Greed; Idea that people do
what benefits them most
4) Profit Motive: People go into business to make money.
5) Consumer Sovereignty:
Businesses cater to consumers.
6) Competition:
Businesses compete to make money.
Scarcity: The idea that all of our
resources are limited.