Productivity
The measure of output compared to the input used to create it.
What is productivity?
As the price of a product increases, the quantity that consumers are willing to buy decreases.
What is the Law of Demand?
An economic system where the government makes all decisions about production and pricing.
What is a Command?
The primary goal of any business in a private enterprise system.
What is profit?
Goods and services produced in one country and sold to buyers in another.
What are exports?
When a worker focuses on a specific task to become highly efficient at it.
What is specialization?
The point where the quantity supplied and the quantity demanded are equal.
What is equilibrium?
This system relies on customs, beliefs, and history to decide what to produce.
What is a Traditional Economy?
The freedom of consumers to determine which goods and services will be produced by "voting" with their dollars.
What is consumer sovereignty?
A limit on the specific number of goods that can be imported into a country.
What is a quota?
This "ratio" is calculated by dividing the total output by the total number of hours worked.
What is labor productivity?
A situation where the quantity supplied is greater than the quantity demanded.
What is a surplus?
An economy where both the government and the private sector play a role in resource allocation.
What is a Mixed Economy?
Competition between two businesses that sell the exact same type of product, like McDonald’s and Burger King.
What is direct competition?
When a country can produce a good at a lower opportunity cost than another country.
What is comparative advantage?
A non-monetary factor that increases productivity by keeping workers happy and engaged.
What is morale
Luxury items usually have this type of demand, meaning a small change in price leads to a big change in demand.
What is elastic demand?
In a pure market economy, this "invisible force" is said to regulate the market without government interference.
What is competition?
The possibility of failure or loss that an entrepreneur accepts when starting a business.
What is business risk?
A complete ban on trading with a specific country, often for political reasons.
What is an embargo?
The economic principle stating that as more resources are added to a fixed amount of other resources, the extra output eventually declines.
What is the Law of Diminishing Returns?
A graph showing the relationship between the price of a product and the quantity a seller is willing to offer.
What is a supply curve?
These are the three basic questions every economic system must answer: "What to produce?", "How to produce?", and...?
What is "For whom to produce?"
This type of monopoly is allowed by the government because it is more efficient for one company to provide a service, like a water utility.
What is a natural monopoly?
This occurs when a country’s total exports are greater than its total imports.
What is a trade surplus?