VOCAB 1
What are the four factors of production?
1.) Land
2.) Labor
3.) Capitol
4.) Entrepreneurship
What factors control inflation?
The central banks through contractionary monetary policy, mainly by raising interest rates to slow economic demand.
What are substitutes and complements?
Substitute goods are products that can replace each other.
Complementary goods are products used together.
What are variable costs?
Business expenses that change in direct proportion to production volume or sales activity.
What are opportunity costs?
The value of the next-best alternative you give up when making a decision.
What is standard of living?
The level of wealth, comfort, material goods, and necessities available to a person, group, or nation.
What is a subsidy in economics?
A financial benefit, typically provided by the government to businesses, industries, or individuals, designed to reduce costs or encourage specific economic activities.
What is the equilibrium price?
The market price where the quantity of goods supplied by producers exactly equals the quantity demanded by consumers.
What does a production possibilities curve show?
The maximum possible output combinations of two goods an economy can produce, given fixed resources and technology.
What is an entrepreneur?
An individual who starts, organizes, and manages a business venture, assuming significant financial risks in pursuit of profit and innovation.
What are diminishing returns?
The principle that as more of a single variable input is added to fixed inputs, the resulting increase in output will eventually decrease.
What is surplus?
The amount of an asset, resource, or income that exceeds what is required or used, effectively representing an excess quantity.
What is cost benefit analysis?
A structured, data-driven process used to evaluate decisions or projects by comparing the total expected costs against the total projected benefits.
What is a circular flow chart?
A visual economic model illustrating the continuous, closed-loop movement of money, resources, goods, and services between households and businesses.
What are fixed costs?
Business expenses that do not change based on the level of production or sales volume, particularly in the short run.
What is a monopoly?
A market structure where a single company or entity is the exclusive supplier of a particular good or service, facing no viable competition.