Exam Review Flashcards
(34 cards)
Value of the next best alternative….has to be given up for the action that is chosen
Opportunity cost
Company’s office building is an example of…
Capital
Economists build economic models
To help analyze the way the world works.
Does NOT describe what economists do
Use factors of production to produce goods.
A car used by a messenger service is an example of….
Capital
Businesses can make decisions about the best use of their resource ps by analyzing
Production Possibilities
Economics is primarily concerned with…
Use of resources
All the combinations of goods and services that can be produced in a given time with a fixed amount of resources are called
Production possibilities
Entrepreneurship refers to the ability to..
Start new businesses, introduce new products and processes, and improve management techniques.
Adam Smith’s “invisible hand” refers to the role of…
The market
Another term for a capitalist system is a…
Market economy
According to Adam Smith
Government should not interfere in the market place
Major characteristic of a pure market economy is…
Unrestricted competition
It is easier to start your own business in a…
Free enterprise system
The word “equity” means
Fairness
In as capitalist system, most property is…
Private property
Command economy country
North Korea
A laissez-faire system is one in which…
Government interference in the economy is minimal.
What goods and services should be produced, how they should be produced, and who should share in what is produced are the three basic questions addresses by…
All economies
Law of Demand: when price of an item goes up, the quantity demanded….
Falls
Law of Supply: higher prices prompt producers to….
Produce mor
When the price of a good is high for consumers, they look for
Substitutes
The quantity demanded of a product is affected by
Price
Diminishing marginal utility refers to the fact that
Additional satisfaction declines as additional units of an item are consumed
