Economics Assignement (1-2)

Economics
the study of how individuals and societies make choices under the condition of scarcity.

Scarcity
is a condition that exists when there are not enough resources to satisfy all of the competing uses.

Factors of Production
also known as resources, they are the things used to produce goods and services

Labor or Human Resources
includes the physical and mental capabilities of individuals used in the production of goods and services.

Land or Natural Resources
land includes all type of natural resources such as physical land, timer, water, oil, minerals, and plants.

Capital Resources
this includes machines, infrastructure, equipment, and tools. Some examples include trucks, factories, copy machines, etc.

Microeconomics
study of how individuals, households, and businesses make choices.

Macroeconomics
study of the aggregated or total behavior of the economy

Opportunity Cost
is the value of the next best alternative other than the choice that was made.

Trade-Offs
they occur when you give up something to gain something else.

Unintended Consequences
an outcome that is not expected

Marginal Benefit
is the additional positive outcome resulting from an action

Marginal Cost
is the additional price resulting from an action

Incentives
an idea/item/etc. that helps convince or influence someone to do something

Private Ownership
means that individuals are allowed to own property and use it in any legal way they see fit. The most common types of properties are land, houses, and businesses, like farms or factories.

Command Economies
this is when the government almost or completely controls the economies by deciding what goods consumers can buy

Traditional Economies
people often do “what has always been done

Mixed Economies
this combines characteristics from a command economy and a market economy where individuals and the government decide what kind of business, goods, and services they want to have/buy.

Adam Smith
Adam Smith is the author of “The Wealth of Nations” and is known as the “father of economics”

Households
place where a family lives where, consumers analyze their choices based on their expected income and determine the best combination of goods they can afford.

Firms
these have to decide what resources to buy from the market and what goods and services to produce and sell to households

Maximize Satisfaction
consumers analyze their choices based on their expected income and determine the best combination of goods they can afford.

Utility
is the advantage, or fulfillment, a person obtains from consuming a good or service.

Market Economy
this is an economy where the people decide what goods/services to support using their own money instead of having the government do it

Incentives
rewards that help people do a certain task

Consumer Sovereignty
to succeed, businesses must produce goods and services that consumers are willing and able to buy

Entrepreneurs
an enterprising person that has what it takes to lead a business from an idea all the way to a final product or service that you can buy.

Revenue
stream of money

Standard of Living
when a person is living healthy with a decent amount of wealth

Human Capital
this is the total amount of experience, knowledge, skills, etc. that a typical group/person/population has

Capital goods
items that helps produce other items faster, more efficient, cheaper, etc.

Price system
is a component of any economic system that uses prices expressed in any form of money for the valuation and distribution of goods and services and the factors of production

Law of Supply
is the willingness and ability to bring to market (produce and/or sell) specific amounts of a good or service at different prices in a specific time period, considering all things remain the same.

Law of Demand
is the willingness and ability to buy specific quantities of a good or service.

Equilibrium
a balance where two things in capital equal one such as supply and demand

Elasticity
when an object is able to change

Price Ceilings
these regulations help people that are poor and can’t afford resources for their family

Price Floors
when something is auctioned, this is the minimum price

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