- you can't have everything - unlimited wants vs. limited needs - DEMAND is greater than SUPPLY

Chapter 1: What is Economics? Flashcards by Sam Simpson

What is scarcity?

you can’t have everything
unlimited wants vs. limited needs
DEMAND is greater than SUPPLY

How well did you know this?

Not at all

Perfectly

What determines demand?

price

How well did you know this?

Not at all

Perfectly

Who is limited in terms of money and how?

INDIVUIDALS
- income
- borrowing
- savings
COOPERATIONS
- profits
- equity financing
GOVERNMENT
-taxes
-borrowing
-printing (monetize)

How well did you know this?

Not at all

Perfectly

What are GOODS?

tangible (produced) items of value

How well did you know this?

Not at all

Perfectly

What are SERVICES?

facilitating something

- transaction in which no physical goods are transferred from buyer to seller

How well did you know this?

Not at all

Perfectly

What are RESOURCES?

anything used as an input in the creation of goods and services

How well did you know this?

Not at all

Perfectly

What are FACTORS OF PRODUCTION?

resources including land, labor, capital, and enterpreneurship

How well did you know this?

Not at all

Perfectly

What is SCARCITY?

condition resulting from unlimited wants and limited resources

How well did you know this?

Not at all

Perfectly

What is ECONOMIZE?

effort to get the most out of ones resources

How well did you know this?

Not at all

Perfectly

What is EFFICIENCY?

to do more with the same or the same with less

How well did you know this?

Not at all

Perfectly

What is INCOME?

return in the form of wages, profit, rent, and interest earned by the factors of production

How well did you know this?

Not at all

Perfectly

What is WEALTH?

the value of the things we own

How well did you know this?

Not at all

Perfectly

What is NETWORTH?

left over money

How well did you know this?

Not at all

Perfectly

What is PROFIT?

what remains after the cost of doing business have been met

How well did you know this?

Not at all

Perfectly

What is another name for profit?

residual

How well did you know this?

Not at all

Perfectly

What is another name for residual?

profit

How well did you know this?

Not at all

Perfectly

What is TRADEOFF?

giving up on something in order to obtain something more desirable

How well did you know this?

Not at all

Perfectly

What is another name for tradeoff?

opportunity cost

How well did you know this?

Not at all

Perfectly

What is another name for opportunity cost?

tradeoff

How well did you know this?

Not at all

Perfectly

What is ECONOMICS?

the study of people make a living

How well did you know this?

Not at all

Perfectly

What two world do economists deal with?

the world that is

- the world that ought to be

How well did you know this?

Not at all

Perfectly

What are the two factors of the world that ought to be?

politics

- personal values

How well did you know this?

Not at all

Perfectly

What do democrats believe should be done about the scarcity of jobs?

believe government should provide jobs

How well did you know this?

Not at all

Perfectly

What do republicans believe should be done about the scarcity of jobs?

believe private sectors/companies should provide jobs

How well did you know this?

Not at all

Perfectly

What is another name for natural resources?

land

What is another name for human resources?

labor

What are the four factors of production and define/explain them all

NATURAL RESOURCES things provided by nature that go into the creation of goods and services HUMAN RESOURCES physical and mental effort that people put into the creation of goods and services CAPITAL - something created by people to produce other goods and services - describes the money available to a business firm ENTREPRENEURSHIP managerial or organizational skills needed by firms to produce goods and services

What is the price paid for the use of natural resources called?

rent

What is the price paid for the use of human resources called?

wages

Can you make money both physically and mentally?

yes

What is VENTURE CAPITAL?

first money made/collected

What is the payment used for someones money called?

intrest

What are rewards for entrepreneurship?

profit

What are the four economic questions that dictates the type of system a country has?

- What good are to be produced? - How are these goods to be produced? - Who receives the goods that are produced? - How does society obtain their goods?

If the same goods are produced time after time, what economic system does the society have?

trditional

If goods are produced based on the demand of consumers, what economic system does the society have?

market

If goods are produced based on the instructions of the governmnet, what economic system does the society have?

command

What economic system is represented when produce is efficient?

market

What economic system is represented when the government dictates who gets what?

command

What economic system is represented when goods are produced they same way they have always been?

traditional

What economic system is represented when the people with the most money get the goods?

market

What economic system is represented when the government dictates who gets what?

command

What economic system is represented when the same people get the same goods?

traditional

How does a society obtain their goods?

- produce the goods themselves (mercantilism) - trade for them (fair trade) - gifting

What has been the problem with trade since 1960?

the US has a defect balance of trade

What are suggested solutions to the US's defect balance of trade?

- tariff | - be efficient

Explain how to raise living standards in lesser developed countries...

you need to have an agricultural revolution so that farmers can be released from the farms (while the farms are still producing) and sent to work in the city and then the industrial can begin ones the agricultural revolution is finished

What are the types of economic systems?

- traditional - command - market - mixed

What is an ECONOMIC SYSTEM?

approach a country uses to deal with scarcity and achieve its economic goals

What is PROFIT MOTIVE?

the force that drives owners to produce what buyers want at the lowest price

What is MARKET PLACE?

any place where goods are bought and sold

What is SUBSISTANCE LEVEL?

level of income necessary to maintain a minimum standard of living (just enough money to survive)

What is INTENSIVE FARMING?

more people than land

What is EXTENSIVE FARMING?

more land than peple

What are the traits of a traditional economic system?

- change and growth proceeds slowly - people do what their parents have done before them - most goods are produced and consumed locally - practice intensive farming

What are the traits of a command economic system?

a system where all major decisions concerning allocation of resources are made by government agencies

What is an example of a command economic system?

Gosplan - Russia's five years plans

What are the traits of a market economic system?

- private ownership of land (land and capital) - competition - profits are the key motivation

Out of the four factors of production, which two can be owned?

- capital | - natural resources / land

What is an alternate name for market economic system?

free enterprise

What is an alternate name for free enterprise?

market economy

What is a market economic system?

a system where decisions ate made by individual buyers and sellers in a market place that determines the what, how, and for whom

What is a mixed economic system?

a system that combines elements of private ownership of the means of production with private ownership

What is PUBLIC OWNERSHIP?

owned by the government (postoffice)

What is PRIVATE OWNERSHIP?

any private company owned by individual(s) (Apple, Microsoft, etc.)

What is the PRODUCTION-POSSIBILITY CURVE?

it illustrates the effect of scarcity and opportunity cost on society

What is an example of the production possibility curve?

spending more on military than domestic and vice versa

What is FRONTIER?

the most a nation could produce if all its resources were fully utilized

What is MICROECONOMICS?

the study of individuals/ consumers and the firm

What is MACROECONOMICS?

the study of the economy as a whole

Chapter 1: What is Economics? Flashcards

(70 cards)