What is economics?
the study of how individuals and societies make decisions about ways to use scarce resources to fulfill wants and needs.
What is production?
Production is how much stuff an individual, business, country, even the WORLD makes.
What is cost?
What is the total amount of money it takes to produce an item.
What are the three types of comparative economies?
Traditional, Command, and Free Market
What are the two basic types of labor jobs?
Wages and Salary
What is macroeconomics?
–The big picture: growth, employment, etc.
–Choices made by large groups (like countries)
List four types of production we all have or use daily?
STUFF – Goods and Services.
Goods – tangible (you can touch it) products we can buy
Services – work that is performed for others
Capital Goods – goods used to provide services or to make money
What is revenue?
What is the total amount of money a company or the government takes in.
Who is deemed the founder of revolutionary communism and socialism?
Karl Marx
What is the major difference between blue collar and white collar jobs?
Blue: manufacturing, working with hands, usually in production of some sort.
White: office, desk jobs, usually controls productions (management)
What is microeconomics?
–How do individuals make economic decisions
What are the four factors of production?
Land
Labor
Capital
Entrepreneurship
What is the biggest difference between fixed costs and variable costs?
Fixed cost is a set price for an item that doesn't change and must be paid monthly, weekly, etc to continue on with that service or good and variable costs is the amount of money a company pays that for something needed but it changes over time.
List 3 principles of a Free Market economy?
Economic questions answered by producers and consumers
Limited government involvement
Private property rights
Wide variety of choices and products
What is called when a company lays off employees to cut/save costs for the company?
What 5 things must society figure out in economics?
WHAT to produce (make)
HOW MUCH to produce (quantity)
HOW to Produce it (manufacture)
FOR WHOM to Produce (who gets what)
WHO gets to make these decisions?
What the three parts and the meaning to the Production Process?
Factors of Production – what we need to make goods and services
Producer – company that makes goods and/or delivers services
Consumer – people who buy goods and services (formerly known as “stuff”)
What is the single most important reason people go into business?
Who wrote the book "The Wealth of Nations"?
Adam Smith
What are the other 3 measures companies take when production decreases?
Define opportunity cost.
The Value of the Next Best Choice
(Ex: Sleeping is the opportunity cost of studying for a test)
What are the 3 factors in Changes of Production?
Specialization
Division of Labor
Consumption
Explain cost benefit analysis?
Marginal Costs vs. the Marginal Benefits of producing an item or making any economic decision. If the Benefit is GREATER than the Cost, then business does it.
List the 6 Principles of Capitalism
Competition
Voluntary Exchange
Private Property
Consumer Sovereignty
Profit Motive
Social Safety Net
How does labor protect itself?