Economy Last Test Flashcards
(63 cards)
Monetary value of all final goods, services, and structures produced within a country’s national borders during a one-year period.
Gross Domestic Product (GDP)
Basic requirement for survival, ncluding food, clothing, and shelter.
Need.
Cost of the next best alternative use of money, time, or resources, when one choice is made rather than another.
Opportunity Cost.
Measure of the amount of output produced in a specific time period with a given amount of resources; normally refers to labor, but can apply to all factors of production.
Productivity
Fundamental economic problem facing all societies resulting from a combination of scarce resources and people’s virtually unlimited needs and wants.
Scarcity.
Something we would like to have but is not necessary for survival.
Want.
Why societies face scarcity?
Because the people wants and needs are often greater than the available resources to satisfy them.
Choices faced by all societies:
WHAT, HOW, FOR WHOM
Factors of Production:
Land, labor, capital, and entrepreneurship.
Forced common ownership of factors of production; used in the former Soviet Union in agriculture and manufacturing.
Collectivization.
Economic system characterized by a central authority that makes the most of the major economic decisions.
Command Economy.
Economic and political system in which factors of production are collectively owned and directed by the state; a theoretically classless society in which everyone works for the common good.
Communism.
Conversion of state-owned factories and other property to private ownership.
Privatization.
Economic system in which supply, demand, and the price system help people allocate resources and make the WHAT, HOW, and FOR WHOM to produce decisions.
Market Economy.
Economic system in which the allocation of scarce resources, and other economic activity, is the result of ritual, habit, or custom.
Traditional Economy.
Why mixed Economies exist?
Because they aim to leverage the benefits of both free-market capitalism and socialism, while mitigating their respective drawbacks.
People who benefit from Mixed Economies
Consumers, entrepreneurs, workers, and society as a whole.
Economies of Chile & South Korea:
South Korea boasts a highly developed, technologically advanced economy, while Chile’s economy is largely based on resource extraction and trade.
A combination of quantities that someone would be willing and able to buy over a range of possible prices at a given moment.
Demand.
Listing showing the quantity demanded at all possible prices that might prevail in the market at a given time.
Demand schedule.
Decrease in additional satisfaction or usefulness as additional units of a product are acquired.
Diminishing Marginal Utility.
A measure of responsiveness that tells us how a dependent variable, such as quantity demanded or quantity supplied, responds to a change in an independent variable such as price.
Elasticity.
Rule stating that more will be demanded at lower prices and less at higher prices; an inverse relationship between price and quantity demanded.
Law of demand.
Demand curve that shows the quantities demanded by everyone who is willing and able to purchase a product at all possible prices at one moment in time.
Market Demand Curve.
