Economics Unit 1 Review Terms – Flashcards
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What is the difference between a good and a service?
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Good> tangible product (car) Service> work of labor performed for someone (haircut)
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Explain the relationship between scarcity and price
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Scarcity determines price
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What is the difference between a need and a want?
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Need> basic requirement Want> something you would like to have You need food and want cheese pizza
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What was the first means of exchange?
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Trade
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What is the difference between producers and consumers?
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Producers make the products and consumers buy them
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What are capital goods?
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Tools, equipment, or other manufactured goods
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What are capital goods used for?
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To produce other goods and services.
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What is the difference between a durable good and a non-durable good?
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Durable> 3+ years Non-durable> less than 3 years
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What university did the founder of Under Armour attend?
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University of Maryland
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What is an entrepreneur? What are the goals of an entrepreneur?
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A risk-taking individual hoping for profits.
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What are the assumptions made with a production possibilities curve?
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2 products/goods, technology does not change, #of resources does not change
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If available resources and technology increase, what direction will a production possibility curve move?
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Up/to the right
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List the 4 factors of production
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Land, capital, labor, and entrepreneurs
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List the three basic economic questions that all systems must answer.
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What to produce? How to produce it? For whom to produce?
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List the 3 types of economic systems and explain how they answer the 3 basic questions
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Traditional economy> by habits and customs Command economy> by the government Market economy> by the individuals
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How does a mixed economy answer the 3 questions?
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The government and individuals
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What is the result of limited resources and unlimited wants?
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Scarcity
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Why does specialization increase productivity?
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Performing one task better and more efficiently
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What are the two markets represented by the circular flow diagram?
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Product and factor markets
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Explain how resources move through the circular flow diagram?
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Businesses produce products and consumers buy them
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What is economic efficiency?
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If resources are wasted, fewer goods and services can be produced and fewer wants and needs can be satisfied
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What is the role of private property in the three economic systems?
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Traditional> a lot because everything is shared Command> severely limited
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List and define the economic goals of the U.S.
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Economic freedom, economic efficiency, economic equity, economic security, full employment, price stability, economic growth, future goals
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A car used to deliver Chinese food is being used as what type of factor of production?
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Capital
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What is the difference between consumer goods and capital goods?
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Consumer goods> intended to be used by consumers Capital goods> tools or equipment used to produce other goods and services
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What is opportunity cost?
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What is given up when you make a choice.
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What is the opportunity cost of skipping school and receiving ASD?
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After school detention
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What is utility?
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Ability or capacity of a good or service to be useful and give satisfaction to someone.
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What are the 3 main types of business organizations in the U.S.? Advantages? Disadvantages?
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Sole Proprietorships (Easy to start, unlimited liabiltiy) Partnership (Easy to start, Unlimited liability) Corporations (Limited liability, expensive to start)
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What do limited and unlimited liability mean?
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Limited liability> corporations are liable Unlimited liability> owners are liable for everything
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What are the steps in forming a corporation?
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A charter needs to be granted
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What are the two different types of mergers?
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Vertical and horizontal
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What represents ownership in a corporation?
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Stock
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What are the 2 ways to buy and sell stock?
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Stock broker and on the internet
