Economic Basics
This is the fundamental economic problem that results because resources are limited while human wants are virtually unlimited.
What is scarcity?
This social science studies how people satisfy seemingly unlimited and competing needs and wants using scarce resources.
What is economics?
Give 5 examples of a Need
Water, Food, Shelter, Clothing, Healthcare
Give 5 examples of a Want
Non‑essential desires such as luxury cars, the latest smartphones, designer clothing, vacations, gourmet meals, and high‑end electronics.
Define factors of production
the resources that are used to make goods and services
This economic concept refers to the next-best alternative that must be given up when a choice is made.
What is opportunity cost?
In this type of economy, economic decisions are largely based on customs, traditions, and habits.
What is a traditional economy?
In this economic system, a central authority makes the major decisions about production and distribution.
What is a command economy?
In this system, individuals and businesses generally make economic decisions based on supply, demand, and their own interests.
What is a market economy?
An economy that combines characteristics of traditional, command, and market economies is called this.
What is a mixed economy?
A major advantage of a traditional economy is that economic decisions are often predictable because they are based on this.
What are customs and traditions?
This term refers to the usefulness or satisfaction a consumer receives from a good or service.
What is utility?
Adam Smith argued that individuals pursuing their own self-interest could help promote this broader economic outcome
What is economic prosperity?
A business owner risks her money to start a new company. What factor of production does she represent?
What is entrepreneurship?
This economic concept means that consumers and producers are generally free to make their own economic decisions.
What is economic freedom?
This principle means that individuals generally have the right to own property and businesses.
What is private property?
When consumers have the freedom to choose which products they purchase, this is an example of what?
What is consumer sovereignty?
Adam Smith argued that when individuals pursue their own self-interest in a competitive market, their actions can unintentionally benefit society. What concept describes this idea?
What is the invisible hand?
A government does not own most businesses, but it regulates pollution, establishes safety standards, collects taxes, and provides public services. What does this tell us about the U.S. economy?
What is that the United States has a mixed economy?
This economic concept means that consumers and producers are generally free to make their own economic decisions.
What is economic freedom?
This famous Scottish economist wrote The Wealth of Nations in 1776.
Who is Adam Smith?
What are the three basic economic questions every society must answer?
What to produce, how to produce, and for whom to produce.
A company develops a faster and cheaper way to manufacture smartphones. Other companies must improve their products or risk losing customers. What feature of free enterprise is encouraging these improvements?
What is competition?
A country has enough resources to produce either 500,000 smartphones or 100,000 cars. If it decides to produce more smartphones, it must give up some car production. What does this demonstrate?
What is a trade-off?
This German philosopher and economist co-authored The Communist Manifesto.
Who is Karl Marx?