the study of the choices people make to attain their goals, given their scare resources
limited quantities of resources to meet unlimited wants
Three economic questions
Whom to produce for? How many to produce? What to produce?
The endless desires of consumer
the condition of there not being enough resources to fulfill all wants and needs
Scottish political economist and philosopher. His Wealth of Nations (1776) laid the foundations of classical free-market economic theory, government should not interfere with economics. Advocates Laissez Faire and founder of "invisible hand"
founder of modern communism and socialism
Factors of production
land, labor, and capital; the three groups of resources that are used to make all goods and services
productive work (especially physical work done for wages)
any human-made resource that is used to create other goods and services
a person who starts up and takes on the risk of a business
an economic system based on free enterprise, in which businesses are privately owned, and production and prices are determined by supply and demand
An economic system in which the government controls a country's economy.
North Korea and Cuba
example of countries that have a Command economy
market-based economic system with limited government involvement
example of a country that has a mixed economy
economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services
Third world countries
example of countries that have a traditional economy
I nt his type of an economy - you have a low GDP per capita (little money spent on each person) - produce what they need to survive
gifts of nature