Scarcity and the Science of Economics
Manufactured items that are used to produce other goods and services
What is capital?
An organized way of providing for the wants and needs of their people
What is an Economic System?
The measure of the amount of output gained from one unit of input
What is productivity?
A graph showing the amount of two products that an economy can produce
What is a production possibilities frontier?
A cost you have already paid and cannot recover
What is sunk cost?
Being able to produce more of a good than a competitor, or being able to produce the good using less resources
What is absolute advantage?
The producer who has the lowest opportunity cost.
What is comparative advantage?
A system in which a central authority makes most of the WHAT, HOW, and FOR WHOM decisions.
What is a command economy?
The 3 basic economic questions a country must answer.
What is what to produce, how to produce, and for whom to produce?
A tractor is this type of good
What is a capital good?
A type of economy in which consumers and privately owned businesses, rather than the government, make the majority of the WHAT, HOW, and FOR WHOM decisions
What is a Mixed Economy?
(also accept Market Economy)
A system where people and firms act in their own self-interest to answer the WHAT, HOW, and FOR WHOM questions.
What is a market economy?
The name for the skills and education possessed by workers
What is human capital?
When different workers each do different tasks.
What is specialization?
Three categories of economic decision-makers
What are households, firms, and the government?