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Economics Exam 1 Key Terms - Mr. Rogers
This covers Ch.1 and 2 of the Study Guides, and units 1 and 2 of the course. Thanks to Sandra Walther for making this. If you see any errors let Mr. Rogers' know.
Terms in this set (52)
Economy / Economic System
An organized way of providing for the wants and needs of people.
An economy in which the allocation of resources and nearly all other economic activity stems from ritual, habit, or custom.
An economy in which a central authority makes most of the WHAT, HOW, and FOR WHOM decisions.
An economy in which people and firms act in their own best interests to answer the WHAT, HOW, and FOR WHOM questions.
A federal program of diability and retirement benefits that covers most working people.
A rise in the general level of prices.
An income that does not increase even though prices go up.
A system in which private citizens own the factors of production.
Economy in which competition is allowed to flourish with a minimum of government interference.
The act of buyers and sellers freely and willingly engaging in market transactions.
Private Property Rights
The privilege that entitles people to own and control their possessions as they wish.
The extent to which persons or organizations are better off at the end of a period than they were at the beginning.
The driving force that encourages people and organizations to improve their material well-being.
The struggle among sellers to attract consumers while lowering costs.
The role of the consumer as ruler of the market.
Mixed Economy / Modified Private Enterprise Economy
Economy in which people carry on their economic affairs freely but are subject to some government intervention and regulations.
The condition that results from society not having enough resources to produce all the things people would like to have.
The study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources.
A basic requirement for survival that includes food, clothing, and shelter.
A way of expressing a need.
Factors of Production
Resources required to produce things people would like to have; they include land, capital, labor, and entrepreneurs.
Natural resources not created by humans
The tools, equipment, machinery, and factories used in the production of goods and services.
The money used to buy the tools and equipment used in a production.
People with all their efforts, abilities, and skills.
A risk-taker in search of profits who does something new with existing resources.
The process of creating goods and services.
Gross Domestic Product (GDP)
The dollar value of all final goods, servies, and structure produced within a country's borders in a 12-month-period.
A good or service that is useful, relatively scarce, and transferable toothers.
An item that is economically useful or satisfies an economic want.
An item intended for final use by individuals.
A manufactured item used to produce other goods and services.
Work that is performed for someone.
A worth that can be expressed in dollars and cents.
Paradox of Value
The sitiation in which some non-necessities have a much higher value than some necessities.
The capacity to be useful and provide satisfaction.
The accumulation of those economic products that are tangible, scarce, useful, and transferable from one person to another.
A location or other mechanism that allows buyers and sellers to echange a certain economic product.
A market where productive resources are bought and sold.
A market where producers sell their goods and servces to consumers.
The increase in a nation's total output of goods and services over time.
A measure of the amount of output produced by a given amount of inputs in a specific period of time.
Division of Labor
Work arranged so that individual workers do fewer tasks than before.
Situation in which a factor of production performs tasks that it can do relatively more efficiently than others.
The sum of the skills, abilities, health, and motivation of people.
Reliance on one another to provide the goods and services that people consume.
The cost of the next best alternative use of money, time, or resources when one choice is made rather than another.
Production Possibilities Frontier
A diagram representing various combinations of goods and/or services an economy can produce when all productive resources are fully employed.
A way of thinking about a problem that compares the costs of an action to the benefits recieved.
Free Enterprise Economy
System in which consumers and privately owned businesses, rather than the government, make the majority of the WHAT, HOW, and FOR WHOM decisions.
Standard of Living
The quality of life based on possessions that make life easier.
Recommended textbook explanations
Cambridge IGCSE Business Studies
Karen Borrington, Peter Stimpson
Gary E. Clayton
Explorations in Economics
William A. McEachern
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