CC 1
The study of people and choices.
What is economics?
The first modern economist.
Who is Adam Smith?
The three things that can be owned or controlled in a society (according to Karl Marx).
What is land, labor, and capital.
Supply and demand regulate this.
What is production?
Something that motivates you to do something.
What is an incentive?
Focusing work on a specific skill.
What is specialization?
The indirect and sometimes unintended benefits for society that result from operations of a free market economy.
What is the invisible hand?
The government makes all of the decisions in this economy.
What is a planned economy?
The exploitation of an incentive that makes a situation worse. (ex: rat tail issue)
What is a negative incentive?
What is a command economy?
Infinite wants but finite resources refers to this.
What is scarcity?
The action that must be given up to acquire something else.
When a country, given its resources, can produce more of a particular good.
What is absolute advantage?
Safety standards, labor laws, and limits on air pollution are examples of this.
What is government regulations?
These two things make the world better off.
What is specialization and trade?
How many people a company should hire is a decision made by a business at this level of economics. (hint: there are two levels).
What is microeconomics?
When a country, given its resources, can produce a good at a lower opportunity cost, relative to another country.
What is comparative advantage?
Businesses pay for this (reference the Circular flow model).
Any production outside of the curve on a PPF chart. (hint: think about what countries can produce/cannot produce).
What is impossible?