Advertisement Upgrade to remove ads

Need

something like air, food, shelter that is necessary for survival

want

an item that we desire but that is not essential to survival

economics

the study of how people seek to satisfy their needs and wants by making choices

goods

physical objects such as clothes or shoes

services

Actions or activities that one person performs for another

scarcity

limited quantities of resorces to meed unlimited wants

shortage

a situation in which good or services in unavaliable

Factors of production

land labor and capital

Land

Natural resources that are used to make all good and services

labor

the effort that people devote to a task for which they are paid

capital

any human made resource that is used to create other goods and services

Physical capital

all human goods that are used to produce other goods and services tools and buildings

human capital

the skills and knowledge gained by a worker through education and experience

entrepreneur

ambitious leader who combines land labor and capital to create and market new goods and services

Guns or butter

government choices between making military goods and consumer goods

Trade off

an alternative that we sacrifice when we make a decision

opportunity cost

the most desirable alternative given up as the result of a decision.

think at the margin

deciding whether to do or use one additional unit of some resource

production possibility curve

a graph that shows alternative ways to use an economy's resources.

production possibilities frontier

a graph that shows maximum possiablites output.

efficiency

using resources in such a way as to maximize the production of good services

cost

to an economist the alternative that is given up because of a decision

law of increasing cost

law that states that as we shift factors of production from making one good or service to another the cost of producing the second item increasing

economic system

the method used by a society to produce and distribute good and services

factor payments

the income people receiving for supplying factors of production

patriotism

the love of ones country

safety net

government programs that protect people experiencing un favorable economic conditions

standard living

level of economic prosperity

traditional economy

economic system that relies on habit custom or rural to decide questions of productions

market economy

economic system in which decisions on productions and consumption

centrally planned economy

economic system in which central government makes decision

command economies

central authority is in command

mixed economy

market based economy system with limited government involvement

Market

an arrangement that allows buyers and sellers to exchange things

specialization

the concentration of the productive efforts of individuals and firms on a limited number of activities

firm

and organization that uses resources to produce a product which it then sells

factor market

market which firms purchase the factors of production from household

profit

the financial gain made in transaction

product market

the market in which households purchase the goods and services that firms produce

incentive

an expectation that encourages people to behave in a certain way

consumer sovereignty

the power of consumers to decide what gets produces.

socialism

a social and political philosophy based on the belief that democratic means should use to evenly distribute wealth throughout a society

communism

political system characterized by a planned economy with all economic and political power resting in the hands of the central government

collectives

large farm leased from the state to groups of peasant farmers

heavy industry

industry that requires a large capital investment and that produces items used in other industries

laissez faire

doctrine that states that government generally should not intervene in that marketplace

free enterprise

economic system characterized by private or corporate ownership of capital goods

continuum

a range with no clear divisions

transition

period of change in which an economy moves away from a centrally planned economy toward a market based system

privatize

to sell state-run firms to individuals

profit motive

the force that encourages people and organizations to improve their material well-being

open opportunity

the concept that everyone can compete in the market place

legal equality

the giving everyone the same legal rights

private property rights

the concept that people have the right to control their possesses they wish

free contract

the concept that people may decide what agreements they want to enter into

volunteer exchange

the concept that people may decide what and when they want to buy and sell

competition

rivaly among sellers to attract customers while lowering costs

intrest groups

a private organization that tries to persuade public officials to act or vote according to group members interests

public disclosure law

laws requiring to provide full information about their products

public intrest

concerns of the public

macroeconomics

the study of the behavior and decision making of entire economies

microeconomics

study of behavior and decision making of small units. such as individuals

gross domestic product

the total value of all final goods and services products in a partially economy

business cycle

a period of macroeconomics expansion followed by a period on concentration

work ethic

a commitment to the value and work of purposeful activity

public goods

a shared goods or services for which it would take be inficent or impractical to make consumers pay

public sector

the part of the economy that involves the transactions of the government

private sector

the part of the economy that involves the transactions of individuals and businesses

free rider

someone who will not choose to pay for a certain amount good and services but would get benefits

externality

an economic side effect of a good services that generates benefits or cost to someone other that the person deciding

poverty threshold

an income level below that which is needed to support families or households

welfare

government aid poor

cash transfers

direct payments of money to eligible poor people

in-kind benefits

goods and services provided for free or at greatly reduced prices

different types of economy

1. Capitalistic/"Freemarket"
2. Socialistic
3. Mixed Economy

types of capital

1) Subordinate Notes and Debentures
2) Preferred Stock
3) Common Equity Capital/Total Assets

safety net programs

to protect the poor, unemployed, and children

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again

Example:

Reload the page to try again!

Reload

Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Set