The Basics
People who buy things are called what?
Consumers
Businesses exist because they aim to make the most money
Profit motive
Any place or situation where people buy and sell goods and services.
Market
How much of a product/things sellers are willing to sell
Supply
How much of a product/things buyers are willing to buy
Demand
Name the difference between something you cannot live without and something you can live without.
Needs and Wants
Businesses compete with each other to encourage lower prices and new ideas
Competition
This concept is about people's behavior and how they need to be buying and selling things to keep the economy running --> what is the behavior?
Self-interest
When there is not enough supply to meet demand
Shortage
When there is too much supply for the demand
Surplus
Shoes, phone, and table are examples of what?
Goods
Individuals have the right to own land, houses, factories, and companies
Private Property
Consumers have the real power in the market because they control what they want to buy.
Consumer sovereignty
It is the ability for anyone to take part in the market by sharing new ideas, trying something new, set up business, and more
Open Opportunity
Supply and demand will decide what?
Prices
Scarcity is the problem between what?
Unlimited ________?
&
Limited _________?
Unlimited wants and Limited resources
What is capitalism's beliefs with the role of the government?
Limited involvement
Businesses that focuses on specific things to make/sell to do it the best.
Specialization
This means the supply and demand price is balanced
Equilibrium
Law of Demand --> what happens when prices go up?
People buy less
Land, Labor, Capital, Entrepreneurship are an important part of Economics. What are these 4 things called?
Factors of Production
What kind of economic system is opposite of capitalism?
Command Economy / Communism
Law of Supply --> what happens if the price goes down?
Producers make less
In the Circular Flow Model - where the money and resources move everyday. What are three main parts that make the flow happen?
Government, businesses, and individuals/public/household
Who is the man that wrote a book about economic ideas that led to capitalism and that America took on his concepts?
ADAM SMITH!