Scarcity and Value
A good is a useful, tangible item that can be used to satisfy a need or a want.
What is wealth?
Wealth is the accumulation of products that are tangible, are scarce, have utility, and are transferable from one person to another
What is the production possibilities curve used for?
To illustrate all possible combinations of output
What is a free enterprise economy?
Market economy in which privately owned businesses have the freedom to operate for a profit with limited government intervention
What is a mixed economy?
A mixed economy is an economic system that has some combination of traditional, command, and market economies
What is a want?
A want is something we would like to have but is not necessary for survival.
What are the three questions all societies face?
What to produce, how to produce it, whom to produce it for
What is productivity?
Productivity is the measure of the amount of goods and services that are produced within a given amount of resources in a specific period of time
What is an economic system?
An economic system is the way a society organizes and allocates its resources (like land, labor, and capital) to produce goods and services and distribute them to people
What is communism?
Communism is a state of economic and political affairs where everyone could contribute according to their ability and consume according to their needs
What is a need?
A need is a basic requirement for survival such as food, clothing and shelter.
What are the four factors of production?
land, capital, labor, and entrepreneurs.
What is opportunity cost?
Opportunity cost is the cost of the next best alternative use of money, time, and resources, when one choice is made rather than anothe
What is a traditional economic system?
Traditional economies are often based on customs and traditions. People usually do what their ancestors did—like farming or hunting.
Name one advantage and one disadvantage of a mixed economy.
Advantage-- social programs that benefit everyone
Disadvantage -- How to pay for these programs
What does the term economics mean?
Economics is the study of how people try to satisfy seemingly unlimited and competing needs and wants through the careful use of relatively scarce resources
What is consumerism?
An attempt to educate buyers about purchases they make and to demand better and safer products from producers.
What is economic interdependence?
We rely on others, and others rely on us, to provide most of the goods and services we consume.
What is a command economic system?
In a command economy, the government makes most, if not all, of the economic decisions. It controls things like what to produce, how to produce it, and who gets it
The implementation of social programs and government restrictions on businesses mixed with capitalism (market economy would also work)
What are the four types of goods and their defintions?
Durable Good
A good that lasts three years or more when used on a regular basis.
Nondurable Good
An item that lasts less than three years when used on a regular basis
Consumer Good
A good intended for final use by individuals, such as shoes, a shirt, or a car
Capital Good
A good such as machinery or equipment that is used by businesses to produce other products
What are the 5 consumer rights?
Right to Safety
Right to be Informed
Right to Choose
Right to be Heard
Right to Redress (repayment when consumers are harmed by a product)
What two reasons make economic growth important?
Scarcity; everybody wants more goods than exist
Population growth; more people who continue to want more goods
What are the four types of economic systems?
Market, Command, Traditional, Mixed
Why has communism never sustained to its fullest potential?
It is often corrupted with power during the socialist period. During this transition period, the government gains some control of output, and this often leads to a command economy as opposed to communism.