Factors of Production
all natural resources used to make goods and services
Land
The government owns all means of production
Communism
A measure of the amount of goods and services produced with a given amount of resources in a specific time
Productivity
A tangible economic product that is useful and used to satisfy the needs and wants of the people
a good
The Scottish philosopher who came up with laissez-faire
Adam Smith
The effort people devote to a task for which they are paid
Labor
central power or authority makes major decisions
Command Economy
We rely on others and others rely on us to provide most of the goods and services we consume
Economic interdependence
An item that wears out or lasts fewer than 3 years when used regularly
Non durable good
Lasts 3 years when used regularly
Durable Good
Any human made resource that is used to produce other goods and services
Capital
The Workers own the means of Production
Socialism
Assignment of tasks to all workers, factories, regions, or nations that can preform them most efficiently
Specialization
A tool or machine that is used by businesses to produce products
a capital good
Are an alternative we sacrifice when we make a decision
Trade Off
The knowledge or skills a worker gains through education and experience
Human Capital
An economy where the government imposes few or no restrictions on buyers and sellers
Free Market (if you say capitalism, I'll give it to you)
A way of organizing work so each worker completes a separate part of the overall task
Division of labor
What you own minus what you owe
Wealth
The most desirable alternative given up as the result of a decision
Opportunity Cost
The relationships that eventually lead to other opportunities
(it's not what you know it's who you know)
Social Capital
The use of scarce resources stem from ritual, habit, or custom
Traditional
A way of comparing the benefits of an action to the expected costs
Cost benefit analysis
Contradiction between the high value of a nonessential item and the low value of essential items
Paradox of Value
What are the 3 basic economic questions?
What? How? Who?