Fundamental Economic Concepts; Economic Systems
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| 431703562 | economics | the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants | |
| 431703563 | scarcity | a situation in which unlimited wants exceed the limited resources available to fulfill those wants | |
| 431703564 | trade-offs | giving up one thing in favor of another | |
| 431703565 | opportunity costs | the highest-valued alternative that must be forgone when a choice is made | |
| 431703566 | rational decisions | choice in which you weigh the costs and benefits of each option | |
| 431703567 | marginal benefit | the additional satisfaction or benefit received when one more unit is produced | |
| 431703568 | marginal cost | the cost of producing one more unit of a good. | |
| 431703569 | marginal benefit-marginal cost analysis | Rational decision making involves marginal benefits that equal or exceed the marginal costs | |
| 431703570 | resources | anything that is used to produce goods or services | |
| 431703571 | allocation of resources | decision on how to divide scarce resources among different uses | |
| 431703572 | goods | tangible products that we use to satisfy our wants and needs | |
| 431703573 | services | actions or activities that one person performs for another | |
| 431703574 | factors of production | land, labor, capital, entrepreneurship | |
| 431703575 | capital goods | Buildings, machines, technology, and tools needed to produce goods and services. | |
| 431703576 | human capital | the skills and knowledge gained by a worker through education and experience | |
| 431703577 | producers | individuals and organizations that determine what products and services will be available for sale. | |
| 431703578 | consumers | people who buy goods and services | |
| 431703579 | entrepreneur | (n.) a person who starts up and takes on the risk of a business | |
| 431703580 | barter | To exchange goods or services without the use of money | |
| 431703581 | production possibilities curve | A curve that shows the possible combinations of two products that an economy can produce, given that its productive resources are fully employed and efficiently used. | |
| 431703582 | specialization | occurs when individual workers focus on single tasks (division of labor), enabling each one to be more efficient and productive | |
| 431703583 | division of labor | the process of dividing work into specialized jobs that are performed by separate individuals | |
| 431703584 | assembly line | Production method that breaks down a complex job into a series of smaller tasks | |
| 431703585 | imports | goods and services purchased from other countries | |
| 431703586 | exports | Goods and services sold to other countries. | |
| 431703587 | voluntary exchange | the act of buyers and sellers freely and willingly engaging in non-fraudulent market transactions. Both parties should benefit from the exchange. | |
| 431703588 | non-fraudulent exchange | without fraud/without deceiving; honest, voluntary exchange | |
| 431703589 | economic systems | The ways in which a society answers the three basic economic questions to organize production, distribution, and consumption of goods and services to solve the economic problem of scarcity | |
| 431703590 | 3 basic economic questions | Every economic system must answer the three basic economic questions: What to produce; How to produce it? For whom to produce? | |
| 431703591 | command economy | a system in which the central government makes all economic decisions | |
| 431703592 | traditional economy | An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next. | |
| 431703593 | market economy | a system based on private ownership, free trade between buyers and sellers, and competition | |
| 431703594 | mixed economy | market-based economic system with limited government involvement. | |
| 431703595 | invisible hand | a term coined by Adam Smith to describe the self-regulating nature of the marketplace | |
| 431703596 | laissez faire | the doctrine that states that government generally should have little or no involvement in the marketplace | |
| 431703597 | comparative advantage | the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than other producers. | |
| 431703598 | absolute advantage | the ability to produce more of a given product using a given amount of resources | |
| 431703599 | free enterprise | The freedom of private businesses to operate competitively for profit with minimal government regulation. | |
| 431703600 | capitalism | economic system in which the means of production are privately owned and operated for profit | |
| 431703601 | incentives | rewards that are offered to try to persuade people to take certain economic actions. Ex. profit and the ownership of private property are incentives to start a business | |
| 431703602 | consumer sovereignty | the role of consumer as the ruler of the market, determining what products will be produced | |
| 431703603 | profit motive | To be motivated by the desire to make money. | |
| 431703604 | private ownership | property/resources that individuals own and control; a core principle of capitalism | |
| 431703605 | role of government | To maintain legal and social framework, overcome market failure by providing public goods and services, maintain competition, redistribute income, correct for externalities, to protect individuals and their property rights, stabilize the economy | |
| 431703606 | government regulation | a rule that a government establishes and enforces to protect the public or provide equal access to specific goods, and services. | |
| 431703607 | deregulation | the removal of some government controls over a market | |
| 431703608 | privatization | To change from government or public ownership or control to private ownership or control. | |
| 431703609 | income redistribution | government activity that takes income from some people through taxation and uses it to help citizens in need | |
| 431703610 | public goods and services | Goods and services that cannot be withheld from those who don't pay for them, and benefits that may be "consumed" by one person without reducing the amount of the product available for others. Examples include national defense, streetlights, and roads and highways. Public services include welfare programs, law enforcement, and monitoring and regulating trade and the economy. | |
| 431703611 | private goods | Goods that are both excludable and rival in consumption, Goods that, when consumed by one individual, cannot be consumed by another | |
| 431703612 | externalities | costs that are not calculated into the price; spillovers | |
| 431703623 | standard of living | a measure of quality of life based on the amounts and kinds of goods and services a person can buy | |
| 431703624 | inputs | labor, machinery, buildings, and other resources used to produce output | |
| 431703625 | outputs | goods and services that firms produce | |
| 431703626 | productivity | the quantity of goods and services produced from each unit of labor input | |
| 431703627 | economic goals | economic growth, full employment, economic efficiency, price level stability, economic fredom, an equitable distribution of income, economic security, balance of trade | |
| 431703628 | redistribution of income | The transfer of income through government taxation, spending and assistance programs targeted at particular income groups. The goal is to transfer money from higher-income groups to lower-income groups. | |
| 431703629 | capital investments | firms purchase of new machines and buildings. firms invest in capital goods to increase their capacity to produce more goods and services in order to maximize profits | |
| 431703630 | market failures | when free market doesn't provide needed good/services or when free market hurts people | |
| 431703631 | property rights | The rights of an individual or business to own, use, rent, invest in, buy, and sell property. |
