Economics Unit 1: Chapter 1-3 Study Guide – Flashcards
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Trade-off
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Alternative choices
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Scarcity
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A condition that results from society not having enough resources to produce all the things people would like to have
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Opportunity cost
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The best alternative use of money, time, or resources when one choice is made rather than another
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Need
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A basic requirement for survival that includes food, clothing, and shelter
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Want
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A way of expressing a need. An item that is desired, but not essential for survival
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Good
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An item that is economically useful or satisfies and economic want
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Market economy
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And economy in which people and firms act in their own best interest to answer the WHAT, HOW, and FOR WHOM questions
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Economic system
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An organized way of providing for the wants and needs of people
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Capital
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The tools, equipment, machinery, and factories used in the production of goods and services
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Inflation
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A rise in the general level of prices
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Fixed income
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An income that does not increase even though prices go up
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Free enterprise
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Economy in which competition is allowed to flourish with a minimum of government interference
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Voluntary exchange
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The act of buyers and sellers freely and willingly engaging in market transactions that leave both buyer and seller better off
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Partnership
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A business jointly owned by two or more persons
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Conglomerate
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A firm that has at least for businesses, each making unrelated products, none of which is responsible for the majority of the firm's sales
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Cooperative
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A voluntary association of people formed to carry on some kind of economic activity that will benefit its members
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Producer cooperative
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Helps members sell their products
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Nondurable good
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not lasting or enduring; consumable or perishable.
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Multinational
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A corporation that has manufacturing or service operations in a number of different countries
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Corporation
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A form of business organization recognized by law as a separate legal entity having all the rights of an individual
