Definitions
A product intended for final use by an individual.
Consumer Good
Division of Labor
when work is divided between workers to give each a task
What are the 4 Factors of Production and give an example of each?
Land
Labor
Capital
Entrepreneurs
Difference between a want and a need?
A need is a requirement for survival and a want is something that we would like to have but isn't required for survival.
What is TINSTAAFL?
There is no such thing as a free lunch
Gross Domestic Product
Opportunity Cost
the cost of the next best alternative (time, money, etc)
What are the 4 key elements to the study of economics and give an example?
Description (Describing Economic Activity)
Analysis (Analyzing Economic Activity)
Explanation (Communicating the Knowledge of Economic Activity)
Prediction (Using this info to predict the future)
Difference between a good and service?
A good is a tangible item and service is a work performed for someone.
What does TINSTAAFL Mean?
Nothing comes for free and someone has to pay for it.
Capacity to provide satisfaction
Utility
Adam Smith
Writer of the Wealth of Nations, Invisible Hand, Father of Economics
What are the 3 basic questions that an economy must answer?
How to Produce?
For whom to Produce?
What to Produce?
Difference between capital goods and consumer goods?
Capital Goods are tools or goods used by businesses to produce
Consumer Goods are intended for final use by individuals
What do you call the condition in which society doesn't have enough resources to produce everything society wants?
Scarcity
where the factors of production are bought and sold
Factor Markets
Cost-Benefit Analysis
the concept of looking at a problem that compares the cost of an action to the benefits received
What are the 5 consumer rights?
The Right to Safety, The Right to be Informed, The Right to Choose, The Right to be Heard, and The Right to Redress
Difference between Durable Goods and Nondurable Goods?
Durable Goods last 3 or more years when used on a regular basis
Nondurable Goods last fewer than three years when used on a regular basis
(Bonus) What is a visual graph that producers can use to make decisions on how much to make?
Production Possibilities Frontier
Fundamental Economic Problem
Scarcity
Standard of Living
quality of life based on the possession of necessities and luxuries that make life easier.
What are the 2 characteristics needed for something to have value?
Scarcity and Utility
(Tricky Question) Difference between Utility and Value?
Utility is satisfaction that can't be measured or fixed by any amount
Value is worth measured in dollars and can be measured.
The resources required to produce the things we would like to have