Please enter something

Economics Unit 1 Definitions Essay

question

economics
answer

study of how individuals, families, businesses, and societies use limited resources to fulfill their unlimited wants
question

microeconomics
answer

deals with behavior and decision making by small units such as individuals and firms
question

macroeconomics
answer

deals with the economy as a whole and decision making by large units such as governments
question

scarcity
answer

people who do not and can not have enough income and time to satisfy their every want
question

factors of production
answer

resources needed to produce goods and services
question

land
answer

natural resources that exist without human intervention
question

labor
answer

work people do, also known as human resource
question

goods
answer

tangible items that people can but (medicine, clothing, computers, etc)
question

services
answer

activities done for others for a fee
question

capital
answer

the manufactured goods used to make other goods and produce other services
question

productivity
answer

greater quantities of goods and services are produced in better and faster ways
question

entrepreneurship
answer

ability of individuals to start new businesses, introduce new products and processes, and improve management techniques
question

technology
answer

any use of land, labor, and capital that produces goods and services more efficiently
question

a need is something you require for basic survival, a want is something such as a new car or electronics
answer

difference between wants and needs
question

land, labor, capital, and entrepreneurship
answer

what are the four factors of production?
question

scarcity always exists because of competing alternative uses for resources, a shortage is only temporary and mainly occurs after natural disasters
answer

what is the difference between scarcity and shortages?
question

scarcity
answer

what is the condition that results because wants are unlimited?
question

A want
answer

Is needing new clothes classified under a want or a need?
question

trade-off
answer

exchanging one thing for another
question

opportunity cost
answer

the value of the next best alternative that had to be given up to do the action that was chosen
question

production possibility curve
answer

show the maximum combinations of goods and services that can be produced from a fixed amount of resources in a given period of time
question

When making a trade-off you lose something, which relates to opportunity cost where you give up an opportunity
answer

How are trade-offs and opportunity costs related?
question

It requires you to forego one thing when you choose another
answer

What does making a trade-off require you to do?
question

Opportunity cost
answer

What do economists call the next best alternative that was given up for the one chosen?
question

economic cost is the sacrifice involved in performing an activity or following a decision or course of action
answer

In economics, what is cost?
question

They show the maximum combinations of goods and services that can be produced from a fixed amount of resources in a given period of time
answer

What does a production possibilities curve show?
question

economy
answer

all the activity in a nation that together affects the production, distribution, and use of goods and services
question

economic model
answer

theories the economists use in their work
question

hypothesis
answer

an educated guess or prediction
question

Economists have different perspectives and don’t necessarily agree with each other
answer

Why are there three different schools of economic thought?
question

To show activity in a nation that affects the production, distribution, and use of goods and services
answer

For what purpose do economists use real-world data in building models?
question

A theory is referred to as a hypothesis
answer

What are theories in economics called?
question

economic system
answer

the way a nation determines how to use its resources to satisfy its people’s needs and wants
question

traditional economy
answer

answers three basic questions according to tradition
question

command economy
answer

similar to traditional; individual has little, if any influence over how the basic economic questions are answered
question

market economy
answer

capitalism
question

market
answer

voluntary exchange of goods and services between buyers and sellers
question

circular flow of economic activity
answer

the flow of resources, goods, and services, and income in a market system
question

mixed economy
answer

combines basic elements of a pure market economy and a command economy
question

What should be produced? How should it be produced? For whom should it be produced?
answer

What three questions must all economic systems answer?
question

Individuals own factors of production in a market economy
answer

Who owns the factors of production in a market economy?
question

How should it be produced? would be answered
answer

What economic question is being answered if an industry replaces some workers with machines?
question

capitaliam
answer

another name for the market system
question

laissez-faire
answer

pure capitalism
question

free-enterprise system
answer

individuals are free to own and control the factors of production
question

profit
answer

amount left after all the costs of production have been paid (wages, rent, interest, taxes, etc)
question

profit incentive
answer

desire to make profit; also known as profit motive
question

private property
answer

property that is owned by individuals or groups rather than by the federal state or local governments
question

competition
answer

rivalry among producers of similar products to win more businesses by offering lower prices or better quality
question

The government places legal restrictions on freedom of enterprise (zoning regulations, child labor laws, hazardous waste disposal, etc)
answer

What is the role of government in our free-enterprise society?
question

Buyers not sellers, make decisions about what should be produced. The success or failure of a good or service in the marketplace depends on individuals freely choosing what they want to buy
answer

How do freedom of enterprise and freedom of choice apply to the American society?
question

ownership of private property, perfect competition, profit motive, consumers sovereignty, freedom of occupational choice, and least government interference
answer

What are six characteristics of pure economic market?
question

They regulate the quantity of various foods and drugs, watch over the nation’s money and banking system, inspect workplaces for hazardous conditions, and guard against damage to the environment
answer

What is the governments limited role in pure capitalism?
question

People having rights to risk investments, own productive assets, and learn new ways of producing creates wealth and prosperity for all
answer

Why is private property important in the American economic system?
question

economic efficiency
answer

wise use of available resources so as to obtain the greatest benefits possible
question

economic equity
answer

the attempt to balance an economic policy so that everyone benefits fairly
question

standard of living
answer

the material well-being of an individual, group, or nation, measured by how well their necessities and luxuries are satisfied
question

economic growth
answer

expansion of the economy to produce more goods, jobs, and wealth
question

They must be able to support themselves and their families, and use their education to help them become a productive member of the free enterprise system
answer

How can people balance economic rights with economic responsibilities ?
question

Freedom, efficiency, equity, security, stability, and growth
answer

What are three goals of the free-enterprise system?
question

consumer
answer

any person or group that buys or uses goods and services to satisfy personal needs and wants
question

disposable income
answer

income remaining for a person to spend or save after all taxes have been paid
question

discretionary income
answer

money income a person had left to spend on extras after necessities have been bought
question

rational choice
answer

choosing the alternative that has the greatest value from among comparable-quality products
question

Luxury items and entertainment
answer

What kinds of products are purchased with discretionary income?
question

Reason for purchase, concentrate on needs first, and consider trade-offs involved
answer

Before buying anything, what three questions should you ask yourself?
question

No because each person’s value system is different
answer

Do all rational consumers think a like?