Basic economic problem
the mismatch of unlimited wants and needs and limited economic resources.
Capital resources
products and money used to produce goods and services
capitalism
the private ownership of economic resources by individuals rather than by the government
command economy
an economy in which resources are owned and controlled by the government
competition
the rivalry among businesses to sell their goods and services
competitors
buisnesses offering very similar products to the same customers
consumer
a person who buys and uses goods and services
demand
the quantity of a good or service that consumers are willing and able to buy
demand curve
the graphic view of the demand for a product or service. the demand curve for a product for example. illustrates the relationship between the price of the product and the quantity demanded by consumers
economic decision-making
the process of choosing which needs and wants will be satisfied
economic resources
things available to be used to produce goods and services
economic system
the method a country uses to answer the three economic questions
entrepreneur
someone who takes a risk in starting a business to earn a profit
factors of production
economic resources including natural resources, human resources, and capital resources.
freedom of choice
the freedom to make a decisions independently while accepting the consequences of those decisions
goods
things you can see and touch, they are products you can purchase to meet your wants and needs
human resources
people producing goods and services, people who work for a business
market economy
an economy in whjich the resources are owned and controlled by the people of the country
market price
the point where supply and demand are equal
marketplace
anywhere that goods and services are exchanged
mixed economy
An economy that combines elements of the command and market economies.
natural resources
raw materials supplied by nature
needs
things that are required in order to live
opportunity cost
the value of the next-best alternative that you were not able to choose
profit
the amount of money available to the businesses after all costs and expenses have been paid
scarcity
not having enough resources to satisfy your needs
services
activities provided for the satisfaction of others that are consumed at the same time they are produced.
supply
the quantity of a good or service that businesses are willing and able to provide.
supply curve
the graphic view of the supply for a product or service. the supply curve for a product for example. Illustrates the relationship between the price of a product and the quantity businesses will supply
Trade-off
what you make when you give something up to have something else
Traditional Economy
an economy in which goods and services are produced by the way they have always been produced. it is used in countries that are less developed and are not yet participating in the global economy.
wants
things that add comfort and pleasure to your life
True or False: Your needs and wants never end
True
True or False: Products and money used in the production of goods and services are called natural resources
False
True or False: The mismatch of unlimited wants and needs and limited economic resources is called the basic economic problem
True
True or False: The first step in the economic decision-making process is to evaluate the advantages and disadvantages of each choice
False
True or False: The US could best be characterized as a command economy
False
True or False: The right of private property means you can own, use, or dispose of things of value
True
True or False: In a market economy, buying decisions are made by consumers
True
True or False: If heavy competition for a product keeps its price low, businesses will be very motivated to offer the product for sale
True
True or False: If many consumers want a particular service, its price will probably go up
True
True or False: The higher the price, the higher the producer's profit
False
Example of a want
Fine jewelry
The means through which goods and services are produced
Economic resources
Example of a non-capital resource
Employees
The value of the next-best alternative that you did not choose
Opportunity Cost
When a country decides to focus on advanced technology and a skilled labor force, it is primarily answering which of the basic economic questions?
Which wants to satisfy
Personal economic freedom is most limited in a
Command economy
Which of the following is not a characteristics of a capitalistic economy: freedom of choice; government ownership of resources, the profit motive, competition among businesses
Government ownership of resources
Which of the following is a consumer: a business, an individual, the government, all of the above
all of the above
The quantity of a good or service that consumers are willing and able to buy is called
demand
In which of the following situations is demand most likely to be reduced?
Customers cannot find a good substitute for a product they want
Things that add comfort and pleasure to your life
Wants
People producing goods and services
Human resources
Things that are required in order to live
Needs
Things that you can see and touch
Goods
When you give up something to have something else
Tradeoff
Those who determine which products and services will be available for sale
Producers
Raw materials supplied by nature
Natural Resources
Not having enough resources to satisfy every need
Scarcity
Things that are intangible and have no physical characteristics
Services
Those who buy and use goods and services
Consumers
Economic resources are sometimes referred to as:
production
The process of choosing which wants, among several options, will be satisfied is called:
economic decision making
In a(n) _____ economy, goods and services are produced the way they have always been produced.
traditional
The rivalry among businesses to sell their good or service
competition
The point where supply and demand are equal is called
market price