Vocab
This is the basic economic problem caused by limited resources and unlimited wants.
A factory develops a faster way to produce backpacks, doubling the number available in stores. Customer interest in backpacks stays the same.
The price will go down.
An economic system where individuals and businesses own most resources with little to no government involvement?
What is a free market economy? (capitalism)
Money collected by the government to pay for services.
What are taxes?
Money earned from working.
What is income/salary?
The next best alternative you give up when making a decision.
What is opportunity cost?
A local farm has a record-breaking apple harvest, flooding the market with apples. People are buying apples at their usual rate.
The price will decrease
In this system, the government controls production and distribution.
What is command economy?
Roads and national defense are examples of these goods.
What is public goods?
Spending less than you earn is called this.
What is savings?
Making a decision based on a set of alternatives.
Choice
A hurricane damages oil refineries, reducing the amount of gasoline available. Drivers still need the same amount of gas.
Price will go up
The United States uses this type of economy combining elements of market and government control.
What is a mixed economy?
The three main types of tax in the United States
What is sales, income, and property tax?
The three types of business organizations
What is proprietorship, partnership, and corporation?
This helps to create more trade and often lowers the cost of production?
What is technology?
A disease affects cattle, reducing the amount of beef available in stores. Consumers continue to buy beef as usual.
The price will go up.
If the government controls goods such as roads and services such as public safety, but does not interfere with private businesses, what type of economy is this?
What is a mixed economy?
The government takes in taxes to pay for this.
What are public goods and services?
The four resources to run a business
What is natural, human, capital, and entrepreneurship?
Markets are generally allowed to operate without undue interference from the government.
What is free enterprise?
A new study shows that sugary drinks are unhealthy, causing fewer people to buy soda. Soda companies continue producing the same amount.
Price will go down
In a nation, shortages frequently occur because the government sets prices too low and controls production levels. What type of economic system is most likely causing this issue?
What is a command economy?
This is the main source of revenue for the federal government.
What is income tax?
This is what you do to plan for spending for the month.
What is a budget?