UNIT 1 - POD B

outputs

goods and services of value to households

economic goals

how society answers the three key economic questions

Equal Opportunity

At least in America is the free enterprise economy the words to mean that we are born equal in terms of our rights, freedoms and opportunities to make our best talents and abilities. The belief in the United States is that where the wind of opportunities and that is deeply rooted in our country's history as a nation of immigrants. This idea has been invented in the free enterprise system

Resources include . . .

1. Land 2. Labor 3. Machines

three key economic questions

1. What goods and services should be produced? 2. How should these goods and services be produced? 3. Who consumes these goods and services?

What do we give up when we make a choice?

A tradeoff

command economy

An economic system in which the government controls a country's economy; Primary goal is to accumulate wealth and goods for the ruling class.

Renewable Resources

Can be replaced as we use them. Trees

Competition

Competition provides incentives for businesses to create new and better products and different ways of serving their customers.

Binding Contracts

Contracts are agreements between buyers and sellers. Free enterprise depends on buyers and sellers honoring their agreements, and it is important to have a legal system to uphold contracts.

Property Rights

Covering your assets are the rights of those who own land, buildings are other good uses or disposed of as they choose. There are many things that protect these property lights for example intellectual property, patents, and copyrights.

Do businesses demand or supply? Explain.

Demand and Supply (BOTH) They supply goods, but demand the resources to make the goods

Every point on the curve of PPC graphs is _____

Efficient (max amount of goods and services)

Macroeconomics

Focus on the work is og an economy as a whole

Which economic goals are emphasized in a market economy?

Freedom and Efficiency

Which economic goals does a market economy promote?

Freedom and efficiency

Marginal Utility

Is the extra satisfaction you get from an increase on additional unit of a good or service; After a workout buying a gatorade and chugging it, it really quenches your thirst. You drink another one this one does not bring you as much satisfaction as you are not as thirsty. Can lead to negative unity.

What is the difference between human capital and physical capital?

Human capital is knowledge and skill learned through education while physical capital is the tools and machines used

market economy

Individual producers and consumers answer the three key economic questions; Producers make decisions based on consumers' spending decisions. They promote competition and give consumers the choices.

Every point inside the curve of PPC graphs is _____

Inefficient

What does Adam Smith's theory of "the invisible hand" mean?

It is the natural guide and move of an economy The natural will for an economy to keep going; helps keep supply and demand at a steady place

Why is a market economy so efficient in allocating goods and services?

It promotes competition who is better for consumers in terms of quality and sometimes price.

What is the production possibilities curve (PPC)?

It represents the best that an economy can do with its current factors of production.

What does a production possibilities frontier (PPF) show? (What is its purpose?)

It shows how an economy might use its resources to produce two goods.

factors of production

Land Labor Capital Enterpuniship

factors of production

Land, Capital, Labor, Entrepreneurship

Microeconomics

Looks at economic decisions making by individuals, households, and business

Why do we have to make choices?

Materials are limited and cannot satisfy our unlimited wants; All goods and services are also scare

Factors Payment

Rent Wages Interest Profit

Nonrenewable Resources

Ocean that is used, they are gone. Oil

Is the mall an example of a product market or resource market?

Product Market and Resource Market (BOTH)

Profit Motive

Profit is the money earned by business after subtracting the costs of operation. Desire to make a profit is known as the profit motive. Profit motives are closely related to the incentives matter principle and they encourage people to make businesses and keep the economy going.

What are public goods?

Roads, Bridges, Lighets. Goods for the public provided by the government

Utility

Satisfaction one gains from consuming a product or service; Studying for a test lead to better grades

Which economic goals are emphasized in a command economy?

Security and Equity

What is economics?

Social science and thinking about how the world works. The study of how people chooses their limited resources to satisfy their unlimited wants

Which economic goals are emphasized in a traditional economy?

Stability and Security

Economic Freedom (3.4)

The ability of an individual to act in their own best interest in the flea markets. This is often referred to as laissez-faire economy

Trade Offs

The alternative choice not chosen; Binging netflix lead to the tradeoff of not doing your hw or not studying leading to worse grades

Diminishing Marginal Utility

The is no longer a satisfaction of the utility; The pizza that once satisfied you now makes you full and you are unsatisfied.

private sector

The part of the economy that is not directly controlled by the government.

Economics is...

The science of decision making. However it is defined in many ways. Some are, the analyzing of everyday enigmas, analyzing positive economics which describes how things are, making policy recommendations or normative economics. Studying how people use limited resources to satisfy unlimited wants, and the teaching of better decision making.

Opportunity Cost

The value of the next best alternative that you could have chosen; If a family buys a computer they can't say that monte to pay for their second choice, a trip

What characteristics make someone a successful entrepreneur?

They need to be innovating, a good strategist, a risk taker, and a spark plug

Why might a market economy need some government intervention?

To ensure economic freedoms, and equal opportunities. They also can help the Property rights and contracts, promote the General Welfare, preserve competition, protect Customers, workers, and the environment, and stabilize the economy for their country.

When making a decision, how are trade offs different from the opportunity cost?

Trade Offs are all the opponents or alternative choices, while opportunity cost is simple thesecon alternative choice lost.

Every point outside the curve of PPC graphs is _____

Unattainable (without additional resources)

How can we satisfy our wants with limited resources?

We have to make choices because resources are scarce, Economic is all about choices

What are transfer payments?

Welfare, Social Security, Stimulus Packages. Way the government gets money back into the economy, ways the government keeps money and the economy flowing again.

Define and explain a Mixed Economy

Where both the individual and government play important roles with regards to production and consumption.

Shortage

a lack of something, when supply does not meet demand. Temporary - ends when production is resumed, or new resources of supply rae found

Perpetual Resources

a natural resource that is widely available and in no danger of being used up; examples include sunlight and wind

Because of scarcity, we have to make . . .

choices

Who was Adam Smith and why is he important to the study of economics?

considered the father of economics. He was one of the first to bring up economic ideas and questions. Some of his writings he did, for example the wealth of nations, allowed us to learn more about economics. He also proposed free markets and said that competitiveness and limited government in comins allow economies to grow.

Traditional Economy

custom and tradition dictate what to produce, how to produce, and for who (farming, herding, fishing, and hunting)

economic growth

focus on prodigy goods and services, leads to improved standard of living, emphasis on services and technological innovations

economic stability

goods and service we count on (food) are there when we want them

Equation: land+labor+capital =

goods and services

Scarcity

is forever and there will never be enough of everything to satisfy wants

resources are . . .

limited

economic efficiency

makes the most of society resources --- striving for full employment

Economic Freedom

making economic decision w/o govt interference (USA)

Land Resources

natural resources of a nation used to produce goods and services

What is a market?

place where people exchange goods and services. Buyers and sellers exchange goods and services.

Output/input =

productivity

Economists say all resources are ...

scarce

goods and services . . .

scarce

input is

scarce resources

What happens to the PPC if a resource becomes less productive? - the entire graph shifts inwardly, movies to the left

shirinking, economy, struggling

shortages are ____, scarcity is _______

temporary, forever

economic security

the basic needs of every person should be met; seeks to improve the less fortunate with support

economic equity

the fairness with which an economy distributes its resources and wealth

What happens to the PPC if there is a new technology that makes the resources that produce a certain good (in this case a scream), more productive?

the graph is moved outward. - moves to the right. Expanding, growing economy

public sector

the part of the economy that involves the transactions of the government; The part of the economy that is controlled by the government.

economic system

the way a society coordinate the production and consumption of goods and services

good

things that have been creatse for sale or use

wants are ....

unlimited

Limited Government

within a free enterprise protects many things within the economy. Although a free enterprise system generally Doesn't include much government, the amount of limited government gives Productions to his apartment. Some of the protections include protecting property rights and contracts, how much money in the general welfare, preserving competition, protecting customers, consumers, workers, and the environment, and stabilizing the economy.

Services

works done by someone else for which a consumer or business is willing to pay