Economics Q3 Exam
Scarcity
A situation that exists when there are not enough resources to meet and produce all human wants
Want
A way of expressing a need Ex: Gatorade
Trade-offs
Doing one thing at the expense of not being able to do something else instead
Durable vs nondurable goods
Durable goods can be used more than once, unlike nondurable goods
List the 7 Economic Goals of the U.S.
Economic Freedom Economic efficiency Economic Equity Economic Security Full Employment Price Stability Economic growth
Traditional Economy
Economic activity comes from habits and customs -Lack of individual freedom -Elders run the group Ex: Masai of Africa, the Cheyenne
The dollar value of all final goods, services, and structures w/i a country in a 12-month period is:
The GDP
Goods
Useful items to satisfy an economic want
For something to have value, it must have:
Utility
Alexis de Tocqueville
Visited U.S. along the Mississippi, amazed at number of small businesses and farms, and lack of governmental over-control
Three Basic Questions On How to make Good Economic Choices
What? For Whom? How?
Service
Work that is performed for someone
Value
Worth of something in dollars and cents
No
Yes or no a free market economy has GPD
Yes
Yes or no a free market economy has a profit motive
Yes
Yes or no a free market economy has competition
No
Yes or no a free market economy has consumers
Yes
Yes or no a free market economy has economic freedom
No
Yes or no a free market economy has eminent domain
No
Yes or no a free market economy has employment
No
Yes or no a free market economy has factors of production
No
Yes or no a free market economy has govt property
No
Yes or no a free market economy has levels of success
Key Elements of Economics(when you study human behavior)
1. Describe 2. Analyze 3. Explain 4. Predict
Free Enterprise Economy(Y or N): 1GDP Growth- 2Wealth- 3Growth- 4A Profit Motive- 5Money Supply- 6Factors of Production- 7Levels of Success- 8Government Property- 9Private Property- 10Competition- 11Consumers- 12Unemployment- 13Economic Freedom-
1. N 2. N 3. N 4. Y 5. N 6. N 7. N 8. N 9. Y 10. Y 11. N 12. N 13. Y
What are the ways a market system can fail
1.no competition 2. Resources are not allowed to move 3. Info ain't available
TINSTAAFL
Acronym: There Is No Such Thing As A Free Lunch
What are characteristics of a Command economy?
All needs are met, and regulators play a key role in what is to proceed
Consumer
An individual who uses goods and services to satisfy his wants and needs
Need
Basic requirement for survival Ex:Clean water
Adam Smith - The Wealth Of Nations
Importance of specialization, you can take care of yourself, you motivate yourself, you keep the perceived value of your labor
Consumer Goods
Intended for final use by individuals
Utility
Item must be useful and measurable to be of value
4 Factors of Production
Land, Capital, Labor, Entrepreneurs
Economic System
Organized way a society provides for the wants and needs of its people
A model used to demonstrate opportunity cost is the:
Production possibilities frontier
Competition A profit motive Economic freedom
The 3 characteristics of a free market economy include
production possibilities frontier curve
The curved graph we studied is called a...
Land, Labor, Capital, and Entrepreneurs are:
The factors of production
Economics
The social science that studies how people try to satisfy seemingly unlimited and competing wants through the careful use of relatively scarce resources
Gross Domestic Product(GDP)
The total dollar value of all final goods, services, and structures produced w/i a country's borders in a 12-month period
Why was money invented?
To facilitate the exchange of goods and services
Command economy
a central authority makes the key economic decisions of what how and for whom Ex: USSR
Wealth
accumulate products that are tangible, scarce, useful, and transferable
Human Capital
all abilities, skills, health, and motivation of all people
Market economy
people and firms act in their own best interests to answer the WHAT, HOW, and FOR WHOM questions Overtime the economy can adjust based on consumer demand Markets are available and encouraged
Market
place where buyers and sellers come together to exchange products
The purpose of diversification of a stock portfolio is to:
protect against significant losses
