Intro Economics
________ are land, labor, and capital; the three groups of resources that are used to make all goods and services.
Factors of Production
An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.
Traditional economy
business owned and operated by one person
Sole proprietorship
the quantity of a good or service that consumers are willing and able to buy
Demand
A slowdown in a nation's economy
Recession
________ means limited quantities of resources to meet unlimited wants.
Scarcity
An economic system in which the government makes all economic decisions.
A business in which two or more persons combine their assets and skills
Partnership
The quantity of something that producers have available for sale
Supply
a general increase in prices and fall in the purchasing value of money.
Inflation
________ is the economic process or activity of producing goods and services.
economic system in which decisions on the production and consumption of goods and services are based on voluntary exchange in markets
Market Economy
a market structure in which a large number of firms all produce the same product
two goods for which an increase in the price of one leads to a decrease in the demand for the other
Complements
The total output of all economic activity in the nation, including goods and services.
Gross Domestic Product (GDP)
an alternative that must be given up when one choice is made rather than another
Trade-offs
an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
Capitalism
businesses that are owned by many investors who buy shares of stock
Corporations
two goods for which an increase in the price of one leads to an increase in the demand for the other
Subsititutes
an increase in the amount of capital per worker; one source of rising labor productivity
Capital deepening
________ is a graph that describes the maximum amount of one good that can be produced for every possible level of production of the other good.
Production Possibilities Curve
A theory or system of social organization based on the holding of all property in common, actual ownership being ascribed to the community as a whole or to the state.
Communism
a market structure in which only a few sellers offer similar or identical products
Monopoly
producers offer more of a good as its price increases and less as its price falls
Law of Supply
The key measure of inflation- the change in the cost of buying a fixed basket of goods and services.
Consumer Price Index (CPI)