Key Concepts
What is the main economic problem?
People have unlimited wants, but there are limited resources.
What is a consumer?
Person who purchases good and services provided by producers with money.
Who controls a command economy?
The state or government
What is equilibrium price?
Where quantity supplied equals the quantity demanded.
What are resources?
Resources are items needed to produce products.
What is a factor of production?
All components necessary to produce a society's goods/services
What is a wage earner?
What's another term for market economy?
Capitalist
What is a surplus?
What are economics?
It is the study of how goods are produced, supplied, and consumed in society.
What are the four factors of production?
Natural resources, human resources, capital resources, and entrepreneurial resources
What is a business?
Any activity that seeks profit by providing goods or services
Which economic system uses bartering?
Traditional system
What is the difference between scarcity and shortage?
A shortage is when a company has a small supply of a product for a short amount of time (supply and demand), while a scarcity has a small amount of resources needed for a product.
What is opportunity cost?
What you give up when you make a choice to buy something else.
How is price determined?
Price is determined by an agreement between the buyer and seller
What is the want of a producer?
To gain money from selling a service or product
Which economic system uses two kinds of economic systems?
Mixed economy
What is the law of demand from both producer and consumer view?
Producer view: Quantity will go up when price goes down.
Consumer view: Quantity goes down when price goes up.
Inverse relationship
What are needs vs. wants?
A want is something you wish you could have and a need is something that you must have.
What are the four economic systems?
Market, Command, Traditional, Mixed
What is the want of a consumer?
To buy a product or service that they either want or need.
Which economic system has no government involvement and is based on the producer?
Market economy.
What is the law of supply from both the consumer and producer view?
Consumer view: When supply goes up the price goes up, and when the price goes down supply goes down
Producer view: When supply goes up the price goes up, and when the price goes down supply goes down
Direct Relationship
Natural resources are raw materials found in nature, while human resources are knowledge efforts and skills people bring to their work (labor)