Econ exam review Flashcards
(59 cards)
Productions possibility curve
graph that shows possible quantities that can be produced by 2 products
economic independence
ability of an individual to be self-sufficient
capital goods
tools, equipment, machinery, and factories used in production of goods and services
trade-offs
things you give up
opportunity cost
your next best option when making a choice
goods
a real tangible item that has a use and satisfies a want
services
work that is performed by someone
circular flow
economic model that shows exchange of money for goods and services in our economy
law of supply
as price inc, business inc production; as price dec, business will dec production
law of demand
when consumers willing to buy more of a product at a lower price and less at higher prices
determinants of demand
income, substitutes, complements, consumer tastes, expectations, price
determinants of supply
cost of resources, productivity, technology, taxes, subsidies, expectations, government regulations, number of sellers
elasticity of demand
measurement that shows how a change in quantity demanded responds to a change in price
elasticity of supply
measure of quantity supplied to a change in price
3 big questions of economics
what will be produced, how will it be produced, how will it be distributed
scarcity
society doesn’t have enough of the resources to produce everything we want
factors of production
land, labor, entrepreneurship, capital goods
entrepreneurship
most powerful people in economy, start businesses, and have ideas
traditional economies
getting resources based and other econ activities based on ritual, tradition, custom
command economies
government (central authority) tells you what to make
market economies
supply and demand
mixed economies
traditional, command, and market -> poor
free enterprise
capitalistic econ where resources privately owned and competition allowed to flourish without government involvement
role of consumers in economy
consumers rule economy and decide what is made
