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Chapter 16 Economics Coach Snyder

Terms in this set (24)

Define economics
The study of how people use their limited resources to
satisfy their unlimited wants
Define scarcity
-the situation of not having enough resources to satisfy
all one's wants
What 2 factors lead to scarcity?
unlimited wants, limited resources
What are 3 economic questions that all societies face?
What goods and services will be produced
-How will the goods and services be produced
-For whom will the goods and services be produced
What acts as signals to consumers and producers in a market economy?
Prices
Define the following types of economies and know who answers the economic questions (pg. 444) Traditional, Market, Command, Mixed Market
-Traditional: Economic questions answered on a basis of
habit
-Market: individuals and businesses own the resources to
produce goods and services
-Command: planners who work for the government
answer the economic questions
-Mixed Market: has elements of all three types
Define trade off
-giving up one alternative good or service for another
Define opportunity cost and be able to identify in an example
the cost of the next best use of your money or time when
choosing to do one thing
Define variable cost
an expense that changes depending on how much a
business produces
Define fixed costs with an example
-an expense that does not change no matter how much a
business produces
Define revenue
the money a business receives from selling its good or
services
Define marginal cost
the additional cost associated with each increase of one
unit of sales
Define marginal revenue
the additional income received from each increase of
one unit of sales
Define benefit cost analysis
economic model that compares the marginal costs and
marginal benefits of a decision
How are prices established in the United States?
Supply and Demand
Define producers and consumers.
Producers: people or business that produce goods and
services
-Consumers: people who buy goods and service
Define Demand
the amount of a good or service that consumers are
willing and able to buy over a range
of prices
Define supply
the amount of a good or service that producers are
willing and able to sell over a range of prices
Know the relationship between price and demand
Price goes up- Demand goes down
Prices goes down- Demand goes up
Know which way the line slopes on a chart for demand and supply.
Demand-downward sloping line
Supply-upward sloping line
What must markets have in order to be efficient?
Competition
Define equilibrium price.
The price set for a good or service in the marketplace,
where demand and supply are perfectly balanced
A surplus indicates that prices are?
Prices are too high
What are the factors that can cause a change in supply and demand?
Demand: number of consumers, consumer income,
consumer preferences
-Supply: Number of Suppliers, Costs of Production
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