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Fundamental Economic Concepts
Terms in this set (25)
basic condition where unlimited wants exceed limited resources
4 Factors of production
land, labor, capital, and entrepreneurship
What is LAND as a factor of production?
What is LABOR as a factor of production?
What is CAPITAL as a factor of production?
tools used to produce something
What is ENTREPRENEURSHIP as a factor of production?
risk takers and business owners
to distribute, pass out.
giving up the next best alternative when making a choice
giving up one thing to get something else
Production Possibilities curve
illustrates the trade-offs between two options
additional benefit received from consuming one more good
the cost incurred from producing one more unit of a good
when the marginal benefits of an action equal or exceed the marginal costs
Division of Labor
breaking up labor process into smaller pieces (assembly line is an example)
doing one thing well...expert in one part of production
both parties gain when each chooses to exchange (as opposed to being forced to exchange)
3 basic economic questions
what to produce, how to produce it, for whom to produce it?
3 Economic systems
Command economy, Market system and Mixed system
government makes the economic decisions (communism)
Market system economy
Individuals and businesses make the economy decisions so competition, private ownership, profit motive and little government regulation
government, individuals and businesses make the economy decisions
government places control over an industry
taking gov't controls off an industry. Usually leads to more competition and lower prices
leads to higher standard of living, more money and better job security
Investments-factories, machinery, technology, health, education and training leads to...
more productivity, economic growth, (better) future standards of living
THIS SET IS OFTEN IN FOLDERS WITH...
Economics Principles & Practices Chapter…
Economics: Principles and Practices Chap…
Economics: Principles and Practices Chapter 5
Economics: Principles and Practices Chapter 2
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