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Terms in this set (112)
all the natural resources that are used to produce goods and services.
any effort a person devotes to a task for which that person is paid.
any human-made resource that is used to create other goods and services.
a person who assembles the factors of production to create new goods and services.
the study of how people seek to satisfy their needs and wants by making choices.
a finite amount.
occurs when producers will not or cannot offer goods and services.
all the alternatives we give up whenever we choose one course of action over another.
guns or butter
economic decision countries face; a country that decides to produce more military goods has fewer resources to devote to consumer goods and vice versa.
the most desirable alternative given up as a result of a decision.
thinking at the margin
when you decide how much more or less to do.
production possibilities curve
shows alternative ways to use an economy's productive resources.
production possibilities frontier
the line on a production possibilities curve that shows the maximum possible output.
using resources in such a way as to maximize the production of goods and services.
using fewer resources than an economy is capable of using.
the alternative that is given up because of a decision.
law of increasing costs
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 increases.
the method used by a society to produce and distribute goods and services.
the income people receive for supplying factors of production, such as land, labor and capital.
the love of one's country
government programs that protect people experiencing unfavorable economic conditions.
standard of living
level of economic prosperity.
economic system that relies on habit, custom or ritual to decide questions of production and consumption of goods and services.
economic system in which decisions on production and consumption of goods and services are based on voluntary exchange.
economic system in which the central government makes all decisions on the production and consumption of goods and services.
economic system in which a central authority is in command of the economy
market-based economic system with limited government involvement.
making the most of resources
freedom from government intervention in the production and distribution of goods and services.
economic security and predictability
assurance that goods and services will be available, payments will be made on time and a safety net will protect individuals in times of economic disaster.
fair distribution of wealth.
economic growth and innovation
innovation leads to economic growth, and economic growth leads to a higher standard of living.
societies pursue additional goals, such as environmental protection.
the world of commercial activity where goods and services are bought and sold
condition in which resources are primarily devoted to specific tasks
a person or group of people living in the same residence
any business, such as a sole proprietorship, partnership or corporation
a market used to exchange the services of a factor of production.
a thing produced by labor or effort or the result of an act or process.
a market used to exchange a final good or service.
one's own personal gain
a cost or benefit that motivates a decision or action by consumers, businesses or other participants in the economy
the rivalry among sellers to attract customers while lowering costs
term used by Adam Smith to describe the natural force that guides free market capitalism through competition for scarce resources.
the notion that consumers are "king" of the economy because they're the ones who will ultimately determine what goods are produced and how are limited resources are used.
a social and political philosophy based on the belief that democratic means should be used to evenly distribute wealth throughout a society.
a political system characterized by a centrally-planned government with all economic and political power resting in the hands of the central government.
requiring strict obedience to an authority, such as a dictator
large farm leased from the state to groups of peasant farmers
industry that requires a large capital investment and that produces items used in other industries
the force that encourages people and organizations to improve their material well-being.
the concept that everyone can compete in the marketplace
the concept of giving everyone the same legal rights
private property rights
the concept that people have the right and privilege to control their possessions as they wish
the concept that people may decide what agreements they want to enter into
the concept that people may decide what and when they want to buy and sell
a private organization that tries to persuade public officials to act or vote according to group members' interests
public disclosure laws
laws requiring companies to provide full information about their products
the concerns of the public as a whole
Food and Drug Administration (FDA)
sets and enforces standards for food, drugs and cosmetic products
Federal Trade Commission (FTC)
enacts and enforces antitrust laws to protect consumers
Federal Communications Commission (FCC)
regulates interstate and international communications by radio, television, wire, satellite and cable
Federal Aviation Administration (FAA)
regulates civil aviation, air-traffic and piloting standards and air commerce
Equal Employment Opportunity Commission (EEOC)
promotes equal job opportunity through enforcement of civil rights laws, education and other programs
Environmental Protection Agency (EPA)
enacts policies to protect human health and the natural environment
Occupational Safety and Health Administration (OSHA)
enacts policies to save lives, prevent injuries and protect the health of workers
Consumer Product Safety Commission (CPSC)
enacts policies for reducing risks of harm from consumer products
Nuclear Regulatory Commission (NRC)
regulates civilian use of nuclear products
a shared good or service for which it would be impractical to make consumers pay individually and to include nonpayers
the part of the economy that involves the transactions of the government
the part of the economy that involves transactions of individuals and businesses
someone who would not choose to pay for a certain good or service, but would get the benefits of it anyway if it were provided as a public good
occurs when the market does not distribute its resources efficiently
the study of the behavior and decision-making of entire economies
the study of the economic behavior and decision-making of small units, such as individuals, families and businesses
gross domestic product
the total value of all final goods and services produced in a particular economy
a period of macroeconomic expansion followed by a period of contraction
a commitment to the value of work and purposeful activity
the process used to produce a good or service
an economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume
the doctrine that states that the government generally should not intervene in the marketplace
the desire to own something and the ability to pay for it
law of demand
consumers buy more of a good when its price decreases and less when its price increases
when consumers react to an increase in a good's price by consuming less of that good and more of other goods
the change in consumption resulting from a change in real income
table that lists the quantity of a good a person will buy at each different price
market demand schedule
a table that lists the quantity of a good all consumers in a market will buy at each different price
a graphic representation of a demand schedule
a Latin phrase that means "all other things held constant"
a good that consumers demand more of when their incomes increase
a good that consumers demand less of when their incomes increase
two goods that are bought and used together
good used in place of another
elasticity of demand
a measure of how consumers react to a change in price
describes demand that is not very sensitive to a change in price
describes demand that is very sensitive to a change in price
describes demand whose elasticity is exactly equal to 1
the total amount of money a firm receives by selling goods or services
the amount of goods available
law of supply
tendency of supplies to offer more of a good at a higher price
the amount a supplier is willing and able to supply at a certain price
a chart that lists how much of a good a supplier will offer at different prices
a factor that can change
market supply schedule
a chart that lists how much of a good all suppliers will offer at different prices
a graph of the quantity supplied of a good at different prices
market supply curve
a graph of the quantity supplied of a good by all suppliers at different prices
elasticity of supply
a measure of the way quantity supplied reacts to a change in price
exists when a small change in price causes a major change in the quantity supplied.
exists when a change in a good's price has little impact on the quantity supplied.
quickly, inexpensively made and using a few, readily available resources
standards of something with elastic supply
time, money and resources that are not readily available
standards of something with inelastic supply
marginal product of labor
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