Vocabulary (CE.11)
The inability to satisfy all wants at the same time. All resources and goods are limited. This requires that choices be made.
Scarcity
There is no government involvement in this type of economy, they rely on custom and tradition.
Traditional economy
Consists of earnings after all expenses have been paid
Profit
The combining of human, natural, capital, and entrepreneurship resources to make goods or provide services.
Production
A form of business organization with one owner who takes all the risks and all the profits
(Sole) Proprietorship
Name the three factors of production that are used to create goods and services.
Give me an example of each!
Resources: Capital, Human, and Natural.
The consumer is most important in this economy
Minimal government involvement
Free Market
Rivalries that typically result in better quality goods and services at lower prices.
Competition
The price of an item is determined by
The interaction between supply & demand
A form of business organization that is authorized by law to act as a legal entity regardless of the number of owners.
Corporation
This motivates people to change their behavior. Buy one get one free is an example of this concept.
Incentive
Most economies have this type of system today.
Mixed Economy
Consumers determine through purchases what goods and services will be produced.
Consumer sovereignty
Where the supply of goods matches demand
Equilibrium price/point
Samson and Son Lawn Care is a company that provides lawncare services. Samson Senior and his son work together on houses and split the profits.
Partnership
Aaron's Economics test is on Monday but his friends are all playing Fortnite Sunday night. He has decided to play Fortnite instead of studying. What is his opportunity cost?
The opportunity to get a higher grade on the test OR his level of preparedness for the test.
Define an entrepreneur
A person who takes a risk to produce and sell goods and services in search of profit
Individuals and businesses have the right to own this
Private/Personal Property
The wildfires in California ruined many grape crops. What will happen to price of grapes in the coming months? WHY?
The price will increase because the supply decreased.
Individuals trade their labor (resources) to receive this from businesses
income
This invention/innovation has had the greatest impact on the global flow of information
The internet
These are the three basic questions of economics
What will be produced?
How will it be produced?
For whom will it be produced?
The ability for markets/businesses to operate with little government interference
Free Enterprise / Free Markets
What is influenced by the change in price?
The level of demand
In the circular flow model, governments use tax revenue from households and businesses to provide...
PUBLIC goods and services.