Economics Test 1 Review: Introduction to Economics – Flashcards
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Goods
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Physical objects like shoes shirts
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Services
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Action that one person performs for another
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3 factors of production
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Natural resources used to make goods, People getting paid to do work, Finished resources to be sold (also money),
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Entrepreneur
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Person that starts their own business
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Opportunity Cost
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the best thing given to produce and distribute goods and services.
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Economic system
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Method used to produce and distribute goods and services
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patriotism
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Love of your country
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Standard of living
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Level of economic success
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Traditional Economy
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Uses custom to decide how to produce and consume goods and services
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Market Economy
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Free exchange to decide how to produce and consume goods and services
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Command Economy
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Government decides how to produce and consumes goods and services
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Mixed Economy
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Market economy with government involvement
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Communism
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Uses command economy, Everyone makes the same amount of money.
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Capitalism
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Uses market economy, money made is based on competition.
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Lease-Developed Nation
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Nation concerned with food, Sanitation, Disease, and a growing population
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Developing Nation
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Nation with work force, better sanitation and longer life expectations
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Developed Nation
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Technological, Health care, diverse economy, and steady population.
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J.D. Rockefeller
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Around 1900 he started standard oil, the largest oil company in history.
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Andrew Carnegie
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In the 1900 he started U.S steel and became the richest man in U.S history.
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Bill Gates
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He started Microsoft and became a millionaire.
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Profit Motive
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Force that makes people and organization improve.
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Open Opportunity
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Anyone can compete in the free market.
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Voluntary Exchange
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People can decide what they want to buy and sell.
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Macroeconomics
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Study entire economics.
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Microeconomics
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Study small units like families of business.
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Gross Domestic Product (GDP)
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Value of goods and services of an economy.
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4 phases of the business Cycle
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Trough, Contraction, Expansion, Peak
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Public Sector
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Involves the Government
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Private Sector
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Involves individuals and businesses
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Welfare
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Government did to the poor
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Social Security
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Money from the government to every american over the age of 65.
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Medicare
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Government health insurance to people over the age of 62
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Medicaid
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Government health insurance to lower income people.
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Phase 2 of the Business Cycle
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Boom period-economic activity at peak, Businesses working and selling at full capacity
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Phase 3 of the Business Cycle
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Economy starting to slow down
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Phase 4 of the Business Cycle
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Recession
