Economics
When the demand for a good or service is greater than the availability of the good or service.
what is scarcity
Price goes up and people stop buying
What is elastic
Price of a good goes up but people still buy
What is inelastic
Capital can be broken down into 2 forms: Physical & Human capital. Provide an example of each
What is answers will vary
Value of the most desirable alternative when a choice is made between two things
What is opportunity cost
When supply & demand are equal or intersect, it is known as this
What is equilibrium
Actions done for others in exchange for payment
What are services
Products that people consume or use
What are goods
The willingness and ability to purchase goods and services
What is demand
Famous economist Adam Smith came up with this theory stating the forces of supply and demand drive the market
What is the invisible hand
In economics, somebody who buys things is known as a _____________ and somebody who makes things is known as a _______________
What is a consumer & producer
This occurs when quantity demanded is greater than quantity supplied
What is a shortage
The amount of a good and service that businesses are willing and able to produce
What is supply
On the production possibilities curve (PPC), where on the diagram is considered inefficient?
Bonus points if you draw the diagram
What is inside the curve
The three purposes of money
What is
1) a medium of exchange
2) a store of value
3) a unit of account
Economic system in which the government controls and sets prices
What is a command economy?
Commodity or service that is made available to all members of a society even if they don't pay for it. Examples include the fire department, the highway, and the police department.
What are public goods
Economic system based of customs and habits...resistant to change
What is traditional economy
The three basic economic questions each country must ask when developing the economic plan
1) What goods/services will be produced?
2) How will goods/services be produced?
3) Who will consume the goods/services
The main types of economic systems
What is
1) traditional economy
2) command economy
3) market economy
4) mixed economy
The four factors of production
What are
1) land
2) capital
3) labor
4) entrepreneurs
The economic system in which individuals/businesses decide what, how, and how much will be produced/sold
What is capitalism/free market economy
The value of all goods and services produced within a country in a single year
What is the Gross Domestic Product (GDP)
A system that protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.
What is a Mixed Economy
List 3 things that would shift the demand curve.
Hint: Price is NOT one of them.
What is income, tastes/preferences, complement/substitute goods, & more