Economics Q3 Exam

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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


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