ECONOMICS BASICS
What is economics?
The study of how people use limited resources to satisfy unlimited wants.
What is an economic system?
A way a country organizes production and distribution of goods and services.
What is scarcity?
Limited resources and unlimited wants.
What happens when demand increases?
Prices usually increase.
What is opportunity cost?
The next best alternative given up.
What are the two branches of economics?
Microeconomics and Macroeconomics.
Name the three economic systems.
Capitalism, Socialism, and Mixed Economy.
What is a trade-off?
Giving up one thing to gain another.
What happens when supply increases?
Prices usually decrease.
What is marginal cost?
The extra cost of producing one more unit.
What does microeconomics study?
Individual consumers, businesses, and markets.
Which system allows private ownership of businesses?
Capitalism
Why does scarcity exist?
Because resources are limited.
What law explains the relationship between buyers and sellers?
The Law of Supply and Demand.
What is marginal revenue?
The extra income from selling one more unit.
What does macroeconomics study?
The economy as a whole.
Which system is controlled mainly by the government?
Socialism
What is resource allocation?
The process of distributing resources.
What is demand?
The amount consumers want to buy.
If you buy shoes instead of a video game, what is the opportunity cost?
The video game.
Give one example of economics in daily life.
Budgeting money, buying products, saving, etc.
Which economic system combines private business and government control?
Mixed Economy
What is cost-benefit analysis?
Comparing advantages and disadvantages before making a decision.
What is supply?
The amount producers are willing to sell.
Why is marginal analysis important?
It helps businesses and people make better decisions.