Economics Test

  1. not having enough resources
  2. a necessity such as food, water, shelter
  3. something you would like to have but it is not necessary
  4. there is no such thing as a free lunch
    someone had to pay for the food somewhere down the line
  5. 3 basic questions
    • 1. what to produce
    • 2. how to produce
    • 3. For whom to produce
  6. 4 factors of production
    • 1. land (natural resources, sunshine, livestock)
    • 2. labor (people and their efforts and abilities)
    • 3. capital  (tools, equipment, machines, buildings)
    • 4. Entrepreneurs (risk taker who will invest/start to produce/ create
  7. GDP
    • Gross Domestic Product
    • $ value of all goods and services produces in a country
  8. 4 purposes of economics
    • 1. describe economic ideas
    • 2. analyze and figuire out whats going on in economy and determine what is good or bad
    • 3. explain what the ^ means
    • 4. predict whats going to happen next
  9. useful tangible items
  10. lasts for more than 3 years
    durable good
  11. lasts for less than 3 years
    nondurable good
  12. used to make more goods
  13. final product for consumers
    consumer goods
  14. worth that can be expressed in $
  15. some necessities cost less than things that are not necessities
    Paradox of Value
  16. usefullness
  17. to have value something must have
    utility and be scarce
  18. people's skills, abor, ability, health, knowledge
    human capital
  19. organizing work so each person has a specific job they are specialized in
    division of labor
  20. countries are dependent on others for products/services
    Economic Interdependence
  21. alternative choices we make when buying items opportunity casts- the difference in cost for the next "best" item
    trade off
  22. a diagram prepresenting different possible production levels of different items
    production possibilities curve
  23. quality of life based on luxeries owned
    standard of living
  24. do what your ancestors did/ use basic skills and resources/ everyone provides for one another
    traditional economy
  25. + & - to Traditional Economy
    • + = everyone knows their role, immediate needs are met
    • - = discourages new ideas, no room for technological advancement/ lower standard of living
  26. the gov controls all aspects of the economy 
    command economy 
  27. + & - to Command Economy
    • + = can change direction easily, provides for needs of everyone
    • - = consumers have no say, products are lower quality, little to no incentive for new ideas or inventions
  28. people make decision in their best interests (buy what u want)
    market economy
  29. + & - in Market Economy
    + = freedom, promotes/rewards creativity, new ideas, variety, consumer satisfaction
  30. combine elements of others
    mixed economies
  31. Goal: buy/ produce what you want
    economic freedom
  32. Goal: make the best use of resources
    Economic Efficiency
  33. Goal: equality
    Economic Equity
  34. Goal: want to make sure that the economy is stable
    Economic Security
  35. Goal: keep economy getting better
    Economic Growth
  36. Goal: as many jobs as possible stable prices
    Full Employment
  37. 5 Characteristics of Free Enterprise Capitalism
    • 1. Economic Freedom
    • 2. Voluntary Exchange
    • 3. Private Property Rights
    • 4. Profit Motivation
    • 5. Competition
Card Set
Economics Test