Lesson 1
This man introduced a new way of thinking about economic ideas and is called the Father of Economics
Adam Smith
What are the factors of production?
Land, Labor, Capital, Entrepreneurship
What are the three fundamental economic questions for production?
What to produce, how to produce it, and for whom
Based on access to markets, who specialized better the US today or the pioneers
US
The condition that results from people having unlimited wants but limited resources
Scarcity
What is normative economics?
Value judgments to data in order to recommend actions or policies. “How things ought to be”
Why are tradeoffs necessary?
Resources are limited
Which kind of economy is most common today?
Mixed economy
How does division of labor increase productivity?
Workers become expert at one task.
The willingness and ability to take the risks involved in starting and managing a business.
Entrepreneurship
What is the limitation of economic graphs?
They omit factors other thatn those being graphed
What is a perpetual resource, and an example?
A resource that is naturally recurring and cannot be used up. Sunlight, wind, waves
What are the three economic systems
Traditional, command, market
Why do some countries have a comparative advantage in producing raw materials?
Florida & oranges
Differences in natural resources
the development of skills or knowledge in one aspect of a job or field of interest; Getting highly skilled at a specific task
Specialization
If John has six shirts and is trying to decide if he should buy a seventh, he is displaying what economic principle?
Thinking at the Margin
What is the equation of productivity?
Productivity = output/input
What economic goals do traditional economies think are the most important?
Security and stability
What does it mean to say that Jen has a compara ve advantage over Julian for weeding people’s gardens?
Jen's opportunity cost for weeding is lower than Julian's.
Which term best describes the fact that we depend on others to produce most of the goods and services we want?
Economic interdependence
What book did Adam Smith write?
Wealth of Nations
What is the law of diminishing marginal utility?
The more of something you have, the less satisfaction you gain from it
What is the US economic system called? What are three of the seven features?
The free enterprise system
Economic freedom
Competition
Equal Opportunity
Binding Contracts
Property Rights
Profit Motive
Limited Government
In a voluntary exchange, why do people give something up?
to get something they want more
Why has much clothing manufacturing moved from the United States to other countries?