Eco Unit
What are the 5 benefits of free enterprise economy?
- Individual freedom - A variety of goods - Adapting to change - Promotion progress - Creation of wealth
What are the two groups that wants and needs fall into?
Goods and Services
What is the advantage and disadvantage of market economy?
High degree of individual freedom
What is market economy?
Is one where the WHAT, HOW, and FOR WHOM questions are primarily answered by people who make supply and demand decisions in their own best interest.
What is inflation?
Rise in general level of prices
What is economics?
The study of how people try to satisfy seemingly unlimted wants/needs.
What is total cost?
The sum of variable cost plus fixed costs; all costs associated with production.
What is a traditional economy?
The use of scarce resources and nearly all economic activities stems from rituals, habits, or customs.
What is a need?
A basic requirement for survival.
What is microeconomics?
A branch of economic theory that deals with behavior and decision making by small units like individuals and firms.
What is a command economy?
A central authority makes the major decisions about WHAT, HOW, and FOR WHOM to produce.
What is elastic demand?
A change in price causes a large change in quantity demanded.
What is unit elastic demand?
A given change in price causes a proportional change in quantity demanded
What is inelastic demand?
A given change in price causes a small change in quantity demanded.
What is a advantage and disadvantage of traditional economy?
Advantage- Everyone knows which role to play Disadvantage- It discourages new ideas and new ways of doing things
What is a advantage and disadvantage of command economy?
Advantage- It can change directions easily. Disadvantage- No reward for individual initiatives.
What are the advantages and disadvantages of mixed economy?
Advantage- Not restricted to communist- controlled economies Disadvantage- Almost all major European countries persona income taxes are higher.
What is an example of traditional economy?
African Munro and Australian Aborigines
What is total revenue?
All the revenue that a business receives.
What is a trade off?
An alternative that when one choice is made rather than another
What is an example of market economy?
Australia, Canda, Great Britain, Japan, South Korea, parts of Western Europe, and The U.S.
What is demand?
Combination of quantities that someone would be willing and able to buy over a range of possible prices at a given moment.
What are the 6 out of 8 factors that can cause a change in supply?
Cost of resources Productivity Technology Taxes Subsides Government regulations
What are the five characteristics of a capitalist free enterprise economy?
Economic freedom Voluntary exchange Private property Profit motive competition
What is capitalism?
Economic system in which private citizens own and use the factors of products in order to generate profits
What is a mixed economy?
Economic system that has a combination of traditional, command, and market economics.
What does factors of production mean?
Factors of production are productive resources needed to produce goods.
What is biofuel?
Fuel made from wood, pear, municipal solid waste, straw, corn tires, landfill gasses, fish oils, and other waste.
What is an example of a command economy?
North Korea, Cuba, Vietnam, and USSR
What is standard of living?
Quality based on ownership of necessities and luxuries that make life easier.
What is an economic model?
Simplified version of complex concept or behavior expressed in the form of a graph, figure, equation, or diagram
What is supply?
The amount of a product that a would be produced, grown, or acquired and offred for sale at all possible prices that could prevail in the market.
What is scarcity?
The condition that results from society not having enough
What is privatization?
The conversion of state-owned factories and other property to private ownership.
What is Gross Domestic Product?
The dollar value of all final goods, services, and structures produced within a country's borders in a 12-month period.
What is GPD per capita?
The gross domestic product in a per person basis
What is population density?
The number of people per square mile of land area.
What is socialism?
The stage of economic and political system necessary for a country to reach ideal communism.
What is a want?
Wants are simply something we would like but not a necessity.
What is cost-benefit analysis?
comparison of the cost of an action to its benefits
What are the four types of goods?
durable, nondurable, consumer, and capital
What are the four factors of production?
land, labor, capital, entrepreneurship
What is a free enterprise economy?
market economy in which privately owned businesses have the freedom to operate for a profit with limited government intervention