The Basics
The study of how things are bought and sold
What is Economics?
The study of economic decisions made by consumers and producers that affect individuals in an economy.
What is Microeconomics?
The number of items ready for sale.
What is Supply?
Payment for risk taking or entrepreneurship.
What is Profit?
Name the 4 type of economic systems.
Pure Market Economy, Pure Command Economy, Traditional Economy, and Mixed Economy.
Any item that can be bought or sold.
What is a Good?
The possibility of making money.
What is the Profit Motive?
when supply is greater than demand.
What is surplus?
We can never have all we want of every good or service
What is scarcity?
No government involvement in economic decisions. Consumers decide WHAT should be produced. Businesses decide HOW the products will be produced.
What is a Pure Market Economy?
Any action that one person or group does for another in exchange for payment.
What is a Service?
These are the factors of production.
What are Capital, Entrepreneurship, land, and labor?
People who want to buy and use goods and services.
What are Consumers?
The study of economic decisions that affect the economy of a nation
What is Macroeconomics?
Government makes all economic decisions. Gov. runs all businesses, controls all employment, and decides the WHAT, HOW, and WHO.
What is a Pure Command Economy?
Anything used to produce goods and services
What is a Resource?
Individuals own businesses to make a profit.
What is Free Enterprise?
Consumers are willing to buy more of something when prices go down
What is the Law of Demand?
The number of items wanted fro purchase.
What is demand?
This economy is shaped by custom and/or religion. Custom and/or religion determine the WHAT, HOW, and WHO
What is a Traditional Economy?
The process of changing raw materials into economic goods that can be used to satisfy the needs and wants of consumers
What is Production?
You MUST name and define all the Factors of Production.
Capital- Money, buildings, machinery nd equipment used to produce goods and services
Entrepreneurship- the risk taking resources
Land- The environment resources
Labor- mental and physical efforts of people applied to the production of goods and services
Name the factors that change the demand (Demand curve shrift)
Price, Change of Tastes, Change of income, Population, Complementary Goods, and Substitute Goods
Name the 4 type of economic systems that we talked about.
What are Pure Command, Pure Market, Traditional, and Mixed economic systems?
Classification in this type of economy is based on how much government intervention/regulation there is in the economy itself. Most economies in the world today are of this type.
What is a Mixed Economy?