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Flashcards in Civics Chapter 11 Deck (15)
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Factors of Production

The resources people have for producing goods and services to satisfy their wants

1

Capital

Anything produced in an economy that is used to produce other goods or services.

2

Consumption

Act of buying or using goods and services

3

Opportunity Cost

The highest valued benefit given up when a choice is made.

4

Scarcity

Resources are always limited compared to the number and variety of wants people have

5

Quantity

Amount

6

Technology

Practical application of science to commerce or industry

7

Traditional economy

The basic economic decisions are according to long-established patterns of behavior that are unlikely to change

8

Command Economy

The government or a central authority owns or controls the factors of production and makes the basic economic decisions

9

Market economy

A system in which private individuals own the factors of production and are free to make their own choices about consumption, production, and distribution.

10

Profit

Difference between the total cost of production and the total revenues received from the buyers

11

Invest

To use your money to help a business get started or grow, with the hope that the business will earn a profit which you can share.

12

Free enterprise

System in which individuals in a market economy are free to undertake economic activities with little or no involvement of the government

13

Capitalism

System in which people make their own decisions about how to save resources as capital and how to use their capital to produce goods and provide service

14

Mixed economy

Economy that is a mixture of the three basic systems