Basic Economic Problem
Things that are necessary for survival
Needs
What is the main factor that determines supply and demand?
Price
Numerical data or information to see patterns of behavior - economists study these decisions and look for answers
Statistics
What is commonly said system that America uses for its economy?
Capitalism
Communism
Things that are not necessary for survival, it is something extra
Wants
2 Answers:
1) Producers to offer goods and services & willing to sell it
2) Willing to buy good or service & able to pay for it
1) Supply
2) Demand
It means the study of a specific/individual part of an economy - like one business or one product
Microeconomics
It means people and businesses focus on specific areas that they do the best to allow more efficiency
Specialization
The thing you give up when you make a choice.
If you have A and B but you pick A, meaning you lose B.
Opportunity Cost
2 Answers:
1) Physical objects that can be purchased
2) Work that a person performs for another for payment
Goods and Services
The steps of the supply from the bottom to the customer's hands
Supply Chain
It means focusing on the facts and cause-and-effect relationship
"The unemployment rate in the U.S. is 5%"
Positive Economics
The heavy involvement of all actions from businesses to get consumers to buy their products
Competition
Humans have unlimited wants but we have limited resources and time
Scarcity
2 Answers:
1) a person who buys goods and services
2) a person who makes goods or provides services
Consumer & Producer
The balance between supply and demand - main goal is to maintain the prices to satisfy customers and producers
Market Equilibrium
It means the study of the whole economy/looking at the big picture - like unemployment and national debt
Macroeconomics
The market economy will continue to move everyday based on people's need to constantly buy and sell things. This behavior is motivated by what?
Self Interest
Adam Smith came up with this word meaning people are doing things that helps the economy without realizing it
Invisible Hand
What are the Factors of Production? (4 things)
Land, Labor, Capital (money), and Entrepreneurship (starting up a business)
2 Answers based on Law of Supply and Demand:
1) What happens if price increases?
2) What happens if price decreases?
1) Supply goes up and demand goes down
2) Supply goes down and demand goes up
It means focusing on opinions and how things should be.
"The unemployment level should not be more than 5%"
Normative Economics
French phrase meaning "leave things alone" - the principle that the government should not interfere in the market place
Laissez Faire
Business, Government, Households with Factor and Product Markets supports the everyday movement of the economy
Circular Flow Model