Vocabulary
What is the study of how people choose to use limited resources to satisfy their unlimited wants?
The thing that scarcity forces us to do.
What is make tradeoffs?
The allocation method that most closely relates to the lottery.
What is random draw, or allocation method #1?
The economic system that features the least amount of freedom and answers the basic questions of what to produce, how to produce, and for whom to produce by deferring to a powerful leader or central government.
What is command economy?
The factor of production category that matches oil reserves underground in Texas.
What is land?
The definition of the economy.
A practice that makes people better off.
What is trade?
An example of allocation method #5, otherwise known as 'first come, first served.'
What is the first 100 people in line at a homeless shelter that only has 100 beds?
The economic system that features customs and answers the basic economic questions of what to produce, how to produce, and for whom to produce by deferring to how things have always been done.
What is traditional economy?
The factor of production category that matches with the roles humans play and can be improved through education and training.
What is labor/human capital?
Examples of goods and services.
What are products you can purchase, both tangible and intangible (a.k.a the outputs of production).
ex. a pair of shoes and an uber ride
The law that explains why future consequences count.
What is the Law of Unintended Consequences?
An example of allocation method #3, otherwise known as 'performance based.'
What is allocating based on someone's ability to do the most pushups?
Answer will vary
The economic system that relies on little to no intervention and answers the basic questions of what to produce, how to produce, and for whom to produce by deferring to the desires of buyers and sellers.
What is market economy?
The factor of production category that matches a tractor used on a farm.
What is physical capital?
The difference between Opportunity Cost and Tradeoffs.
What is the cost of not choosing the next best alternative versus the cost of not choosing all other alternatives?
The principle that encourages us to notice the small changes, not just the whole sale changes.
What is thinking at the margin?
An allocation method that relies on the decision or whim of a dictator.
What is fiat?
The economic system that features more compromise and answers the basic questions of what to produce, how to produce, and for whom to produce by deferring to a combination of government and public opinion.
What is mixed economy?
The factor of production category that matches the role Steve Jobs played in the creation of Apple.
What is entrepreneur?
The two definitions of scarcity, and why it is known as the fundamental problem of economics.
What is the principle that limited amounts of goods and services are available to meet unlimited wants, a situation in which a resource has more than one valuable use, and because scarcity forces tradeoffs and requires society to make choices about how to allocate the limited resources.
A phenomenon observed by Adam Smith and explained by the principle that markets coordinate trade.
What is the invisible hand?
An example of allocation method #8, otherwise known as 'other.'
What is buying expensive tickets for a really popular concert by being first in line (first come first served) and/or willing to pay more than others (willingness to pay)?
Answers will varyAccording to the textbook, the economic system of the United States.
The purpose of the factors of production in the production equation.
What are inputs?