Economics:Competancy 1

  1. Market Economy
    Relies on voluntary trade. Also known as "free enterprise"
  2. Market
    An arrangement that allows buyers and sellers to make exchanges
  3. Profit
    The incentive to have a buisness
  4. What are 5 concepts in the Economic Way of Thinking?
    • 1) Scarcity forces people to make choices
    • 2) All choices involve alternatives
    • 3) People try to make choices that get them greater benefits than costs
    • 4) People respond to incentives
    • 5) People gain when they trade voluntarily
  5. What are the 3 basic economic decisions in a market economy?
    • 1) What goods and services should be produced
    • 2) How should goods and services be produced
    • 3) For whom will goods and services be produced
  6. Macroeconomics
    The study of the economy as a whole (examples: US, Concord, NH)
  7. Microeconomics
    The study of individual consumers and buisnesses
  8. Cost-Benefit Principal
    How we make decisions comparing the possible benefits of a choice to what it will cost us
  9. Economics
    A social science
  10. Entrepreneur
    Someone who takes buisness risks in hopes of earning a profit
  11. Goods
    Items of value that can be seen or touched
  12. Opportunity Cost
    The highest valued alternative one gives up when making a choice
  13. Scarcity
    The inability to satisfy everybody's wants
  14. Services
    Items of value that cannot be seen or touched
  15. Capital resources
    Machinery and tools
  16. Knowledge about the production and distribution of most products is...
    spread amoung many people who may not even know each other.
  17. In a market economy, what organizes and coordinates the production of goods and services?
    exchange or scarcity
  18. What does a production possibilities graph show?
    alternative ways an individual, a buisness or even a nation can use its resources.
  19. What is a trade-off?
    The choice given up
  20. What are the labels to these blanks? What is this equation called?

    _________ + __________ +____________ = _____________
    natural resource + human resource + capital resource = finished product

    This is called a resource equation.
  21. Create a resource equation where the finished product is a book.
    tree+author+computer/printer= book
  22. What is the fourth factor of production?
    Entrepreneurship, which is the imagination, innovative thinking and management skills it takes to start a buisness
  23. The economic term scarcity is most often used to refer to...
    The condition of limited resources and unlimited wants
  24. Production
    A process that combines economic resources for a result of a good or service
  25. Distribution
    The process of getting a product or service to consumers before the human want is satisfied
  26. Consumption
    Using a product or service completes the want-satisfaction chain
  27. Factors of Production
    Land, labor and capital resources
  28. What type of good is not a subject of economics?
    anything that is free
  29. true or false? a bus station is an example of a capitol resource.
  30. true or false? a resource or a product is scarce if it is not freely available (price=$0)
  31. true or false? people make decisions based upon the extended opportunity cost of a choice.
  32. true or false? a good is free if it involves no apparent cost to you
  33. Celine buys a car for $17,000.
    Five years later, Celine sells that car for $10,000. When Celine sold the car, it was worth __________________ to the buyer.
    at least $10,000
Card Set
Economics:Competancy 1
concord high school economics class