Section 0 - Introduction Flashcards
(14 cards)
Scarcity
Unlimited wants, limited resources. Basically low supply and high demand
Factors of Production (FOP)
Land, Labor, Capital
Ceteris Paribus
“All else stays equal”
Choice
The result of scarcity, how do you allocate these resources?
Utility
Benefits of satisfaction gained from consuming goods/services
Opportunity cost
How much of Good X you have to give up to gain one unit of Good Y.
Economic Good
Things that people want that are scarce.
Free Good
Commodities that have no price or opportunity cost. Its a free good.
Production Possibilities Curve (PPC)
A graph that displays all possible combinations of 2 goods that a country can produce based on a certain amount of time with all its resources used.
Public Sector
The sector of the economy where the government are the ones that provide goods and services (Ex; public hospitals, roads, schools, parks, etc.)
Private Sector
The sector of the economy where profit seeking individuals are the ones that provide goods and services. Like a little kids lemonade stand
Command Economy
An economy where all economic decisions are taken by the central authority. Usually associated with a socialist or communist economic system
Free Market Economy
An economy where decisions are taken by individual households and firms, with no gov’t intervention at all
Mixed Economy
An economy where all economic decisions are made partially by the government and partially by the market (nearly every economy itw is a mixed economy)
