Foundational
intangible actions or activities performed by one person for another for payment
What are services?
TINSTAFFL stands for this
What is there's no such thing as a free lunch?
the doctrine that government generally should not interfere in the marketplace.
What is laissez faire?
this refers to the combination of quantities that someone would be willing and able to buy over a range of possible prices at a given moment.
What is demand?
this refers to the amount of a product offered for sale at all possible prices in a market
What is supply?
tangible, physical items that can be owned and stored
What are goods?
the mechanism that allows buyers and sellers to exchange goods and services
What are markets?
resource use and social behavior are dictated by ritual, habit, or custom
What is a traditional economy?
this principle states that the quantity demanded varies inversely with its price
What is the law of Demand?
this principle states that more product will be offered for sale at higher prices than at lower prices.
What is the law of supply?
land, labor, capital, entrepreneurship
What are the factors of production?
Scottish economist and philosopher who is considered the father of modern economics, best known for his book The Wealth of Nations
Who is Adam Smith?
combines elements of both capitalist and planned economies
What is a mixed economy?
this illustrates the quantities demanded by everyone who is interested in purchasing a product at all possible prices. It is downward sloping
What is a demand curve?
improvements in this determinant enable firms to produce units of output with fewer resources.
What is the determinant of technology and/or productivity?
the process where individuals, firms, or countries focus on producing SPECIFIC goods or services, leading to increased efficiency, productivity, and a greater division of labor. Ex. McDonalds "speedy system"
What is specialization?
a graph that illustrates the maximum possible output combinations of two goods in an economy
What is a production possibilities curve?
a central authority, typically the government, makes all decisions about production, distribution, and pricing of goods and services
What is a centrally planned (communist) economy?
It lists the quantity (x) an individual would demand at all possible prices (y) that might prevail in the market at a given time
What is a demand schedule?
a measure of the degree to which the quantity supplied responds to a change in price
What is supply elasticity?
the ability or capacity of a good or service to be useful and give satisfaction to someone
What is utility?
trade-off a government faces between spending on military defense and spending on domestic needs
What is gun or butter?
production, distribution, and pricing of goods and services are primarily guided by the interactions of private individuals and businesses in the marketplace, driven by supply and demand, with limited government intervention.
What is a (free) market economy?
this "effect" says that as the price of one good rises, people are likely to choose an alternative good.
What is the substitution effect?
similar to the individual supply curve, except that it shows the quantities offered by all producers in a given market.
What is market supply curve?