VOCAB
Water, Food, Medicine
What are Needs?
Pizza, Stuffed Animals, Vacation, Museum Tour
What are wants?
Price of Barbies goes from $10 to $15
Price Change: Graph shows a surplus
An economy based on customs, traditions and beliefs.
What is a Traditional Economy?
The United States Economic System
What is a Mixed Economy?
What are Substitute Goods?
Something you give up when you make a choice
What is Opportunity Cost?
New technology allows trees to be cut down twice as fast
Supply line will shift to the right. Supply Increase.
An economy where the government makes all decisions.
What is a Command Economy?
A high school has one gym but three sports teams that want to use it at the same time.
What is Scarcity?
The fundamental economic problem: limited goods and resources with unlimited wants
What is Scarcity?
Tea, milk and sugar
What are Complementary Goods?
Consumer income is expected to decrease due to a recession. Graph the change in the housing market.
Demand will decrease. Demand shift to the left.
An economy where individuals make the decisions and own the resources
What is a Market Economy?
A city charges a fee for littering to discourage people from throwing trash on the ground
What is a Negative Incentive?
Quantity demanded exceeds quantity supplied
What is Shortage?
When the price of soda goes up from $6 to $8, sales fall by 30%.
What is an Elastic Good?
Corn farmers are unable to purchase equipment because of tariffs.
Supply will decrease. Shift to the left.
An economy where the government lets the market be free until it has to step in.
What is a Mixed Economy?
The government sets a maximum legal price for apartments below equilibrium.
What is a Price Ceiling?
A store offers “Buy One Get One Free” on candy bars.
What is a Positive Incentive?
The price of salt doubles, but shoppers still buy the same amount because it’s used in most cooking.
What is an inelastic good?
The government sets a price ceiling below equilibrium for milk.
The price ceiling will lead to a shortage in milk.
Singapore, Switzerland and Hong Kong are the closest to it.
What is a Market Economy?
When the price of Advil increases, demand does not change.
What is Inelastic?