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- the fundamental economic problem of meeting people’s virtually unlimited wants with scarce resources
scarcity
- natural resources or other “gifts of nature” not created by human effort
land
–good intended for final use by consumers rather than businesses
–Consumer good
The assignment of tasks to the workers, factories, regions, or nations that can perform them more efficiently
Specialization
is a political / economic system in which the government owns and controls some factors of production.
Socialism
- social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources
Economics
- people with all their efforts, abilities and skills
labor
–a good that lasts for at least three years when used regularly
–Durable good
—use of scarce resources and economic activity is based on habit or custom. Things are done how they always have been.
traditional economy
is an economic / political system in which all factors of production are collectively owned / controlled by the state / government.
Communism
- is necessary for survival.
need
- tools, equipment, and factories used in the production of goods and services
capital
–a good that wears out or lasts for fewer than three years when used regularly
–Nondurable good
A central authority (government) makes the major decisions in a
command economy
- business owned and run by a single person who has the rights to all profits and unlimited liability for all debts of the firm
Sole proprietorship
- is something we would like but is not necessary for survival.
A want
- risk-taking individual in search of profits
entrepreneur
–work or labor performed for someone
service
•A ______________ allows people to make decisions in their own best interest based on supply, demand, and the price system
market economy
- are the least numerous form of business organization in the United States.
Partnerships
- productive resources that make up the four categories of land, capital, labor, and entrepreneurs
Factors of production
- are manufactured goods used to produce other goods and services.
Capital goods
The division of work into a number of separate tasks to be performed by different workers
Division of labor
Most economies in the real world are...
mixed economies
The ____________________ buys this right to sell the franchisor's goods or services under an existing business model and trademark.
franchisee