Economic Systems
What are the three basic economic questions all economic systems must answer?
What to produce, how to produce, for whom to produce
What resource includes people who do mental or physical work?
Human resources
Demand means consumers are ______ and ______ to buy a good.
willing and able
A market is where ______ and ______ come together to exchange goods and services.
consumers and producers
What is money mainly used for in an economy?
To trade / exchange goods and services
Which economic system is driven by customers and consumer choice?
market economy
What is division of labor?
Different people do different parts of production
According to the law of demand, what happens when prices go up?
quantity demanded goes down
Competition happens when there are ______ buyers and ______ sellers.
Many buyers and many sellers
Putting money into a bank is called a ______.
deposit
Which system has a central authority deciding what is produced and who gets it?
command economy
What do we call machines, tools, and buildings used to make other goods?
capital resources
If a TikTok trend makes Skittles popular, what happens to demand?
demand increases
When quantity demanded is greater than quantity supplied, what is it called?
shortage
Banks charge higher interest on loans than savings accounts because they want to:
earn a profit
Why does money make trading easier than bartering?
You don’t need a coincidence of wants
What type of goods are used up when making another product?
intermediate goods
If the cost of cheese rises, what happens to the supply of mac & cheese?
supply decreases
How can a store eliminate a shortage during a snowstorm?
raise prices
Besides interest, how else do banks earn money?
fees
craftsperson
How does investing in human capital increase productivity?
Workers gain skills, training, and knowledge
Why does supply increase when prices increase?
producers want to make more profit
Explain the difference between a surplus and shortage.
Surplus: too much supply; Shortage: too much demand
How do borrowers spending money help their community?
they create jobs and income