economics Ch. 1-Ch. 2 – Flashcards
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the study of economics important because it enables us to...
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become better decision makers
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manufactured goods needed to produce other goods and services are called
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capital goods
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division of labor is a characteristic of
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assembly line production
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the dollar value of all final goods, services, and structures produced within a country's borders in a single year is
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gross domestic product
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a popular model used to illustrate the concept of opportunity cost is
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the production possibilities frontier
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an economy at its production possibilities frontier is operation
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at full potential
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entrepreneurs are considered the driving force in an economy because they
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start new businesses
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actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of
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economic interdependence
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the purpose of government in a command economy is to
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make major economic decisions
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an example of a market economy is
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the US
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which group of people ultimately determines the products that a free enterprise economy produces
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consumers
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the US can best be described as having a
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modified free enterprise system
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who plays one of the most important roles in a free enterprise system by starting new businesses
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entrepreneurs
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which of the following is a characteristic of a traditional economy
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it discourages new ideas and new ways of doing things
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a market economy
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doesn't provide for everyones basic needs
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economics
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the study of how people try to satisfy their needs through the careful use of scarce resources
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capital
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tools, equipment, machinery, and factories used in the production of goods and services
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scarcity
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condition of not having enough resources to produce all the things people want
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opportunity cose
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money, time, or resources when one choice is made rather than another
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labor
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people will all their efforts, abilities, and skills
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trade-offs
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alternative choices made by consumers in the marketplace
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standard of living
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quality of life based on the ownership of the necessities and luxuries that make life easier
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good
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tangible item that is economically useful of that satisfies an economic want
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productive efficiency
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products are being produced in the least costly way, any point on the possibilities curve
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allocative efficiency
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the products being produced are the ones most desired by society
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utility- marginal- allocate
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satisfaction additional distribute
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investment
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money spend by businesses to improve their production
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consumer goods
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created for direct consumption
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capital goods
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created for indirect consumption
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services
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actions or activities that one person performs for another
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four factors of production
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land, labor, capital, entrepreneurship
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physical capital
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any human- made resources that is used to create other goods and services
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human capital
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any skills or knowledge gained by a worker through education and experience
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traditional economy
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relies on habit, custom, or ritual
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market economy
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economic decisions are made by individuals and are based on exchange or trade
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command economy
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centrally planned economy, the central government rules and controls
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mixed economies
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market-based economic systems which he government plays a limited role
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economic efficiency
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making the most of scarce resources
