Basics (Goods, Services, Needs, Wants)
These are physical items you can touch, like a burger or a phone
What are Goods?
This is the study of how people make choices to satisfy their needs and wants.
What is Economics?
This is the specific value of the "next best thing" you gave up when you made a choice.
Opportunity Cost?
In this system, the government makes all the decisions about what is produced and how much it costs.
What is a Command Economy?
This type of economy is based on customs, habits, and doing things the way they have always been done.
What is a Traditional Economy?
This term describes activities people do for you, like fixing a car or teaching a class.
What are Services?
This core problem exists because our resources are limited, but our wants are unlimited.
What is Scarcity?
This term describes the act of giving up one benefit to gain another, like sleeping in instead of exercising.
What is a Trade-off?
In this system, also called capitalism, buyers and sellers make their own deals in the marketplace.
What is a Market Economy?
Most modern countries use this system, which blends market freedom with government regulation.
What is a Mixed Economy?
Choice Example: Is "clean drinking water" considered a need or a want?
What is a Need?
When a store runs out of a specific item temporarily, it is called a shortage; when a resource is naturally limited forever, it is called this.
What is Scarcity?
Choice Example: You have $10. You can buy a pizza slice, a movie ticket, or a book. You choose the pizza. Your second choice was the book. What is the opportunity cost?
What is the Book?
A country where the government owns all the factories and sets everyone's wages is an example of which system?
What is a Command Economy?
Choice Example: An economy where people trade (barter) hand-woven rugs for goats, as their ancestors did, is which system?
What is a Traditional Economy?
While a car might be a need for work, a luxury sports car is considered this because it is not essential for survival.
What is a Want?
To solve scarcity, every society must answer three basic questions: What to produce, How to produce, and this.
What is For whom to produce?
Governments face this famous trade-off when deciding whether to spend money on the military or on domestic goods like education.
What is "Guns or Butter"?
Adam Smith’s theory that a market will fix itself without government help is known by this "ghostly" name.
What is the "Invisible Hand"?
In a Mixed Economy, the government provides these types of "safety nets," such as Social Security or public schools.
What are Public Goods (or Social Services)?
These are the four "Factors of Production" used to create all goods and services: Land, Labor, Capital, and this.
What is Entrepreneurship?
If a forest is used for timber, it cannot be used as a wildlife preserve. This situation perfectly illustrates which economic concept?
Opportunity Cost
Choice Example: A business owner spends $10,000 to buy new equipment. While the equipment helps the business, the "Opportunity Cost" of this decision is not the $10,000 itself, but rather this.
What is the next best thing the $10,000 could have been spent on? (e.g., hiring a new employee or saving the money for interest).
This is the primary "signal" in a market economy that tells producers what consumers want and how much to make.
What is Price?
On a scale from 0 to 100 (where 0 is pure Command and 100 is pure Market), most nations sit somewhere in the middle, representing this concept.
What is a Mixed Economy (On the Economic Continuum)