1. Resources
    Anything perople use to obtain their needs or wants.
  2. Scarcity
    People dont and cant have enough income, time, or other resources to satisfy their needs and wants
  3. Define Economics
    The study of how individuals and nations make choices about how to fulfill their needs and wants based on their resources
  4. What is the problem with scarcity?
    Due to limited resources, people have to make economic choices, and choices mean sacrafices. We are greedy and hate sacrafices.
  5. Basic needs
    anything needed for survival
  6. Basic Wants
    all things that are not needed for survival
  7. Shortage
    Something gone temmporarily
  8. Whats another word for types of resources?
    Factors of Production
  9. What are the four types of Factors of Production?
    Land, Labor, Capital, and Entrepreneurship
  10. Land
    Natural resources. All things found in nature on or in water and the Earth.
  11. Labor
    It is NOT the activity of work, it is the worker's job. ex. George mowed the grass. George the landscaper is the Labor
  12. Capital
    Property, machines, tooles, and money (in the form of stocks and bonds) used to make goods and services.
  13. Entrepreneurshop
    The ability for individuals to start new businesses, new product techniques, and improve management
  14. productivity
    ability to produce greater amounts of goods and services better and faster
  15. technology
    any use of land, labor, and capital with the use of science to develop new products and menthods of produching and distributing goods and services.
  16. trade off
    exchanding one thing for the use of another. often making unavoidable choices because of the problem of scarcity
  17. opportunity cost
    the value of the next best alternative gicen up for the alternatve that was chosen. (what you could have, but did not get)
  18. What are the four basic questions all economies must answer?
    • What should be produces?
    • How and how much should be produced?
    • Who should produce it?
    • Who should reviece it?
  19. Who is the founding father of capitalism?
    Adam Simith. Wealth of Nations
  20. Who is the founding father of Communisim?
    Karl Marx. The Communist Manifesto.
  21. Define Production Possibility Curve.
    a graph that shows whats possible to produce based on our resources and what trade offs will be made.
  22. Economic System
    A way in ehich a nation uses its resources to satisfy the peroples needs and wants.
  23. Distribution of Income
    Money payment for work, the abount of healhcare, education, food, and so on, that each member of an economic system recieves.
  24. economic efficiency
    wise use of available resources so that people will be comfortable given the amount and the need of those available resources.
  25. economic growth
    expansion of the economy to produce more goods, jobs, and wealth.
  26. individual freedom
    a goal that would allow each member of society to enjot the freesoms of enterprise, choice, and private property, and to make his or her own decisions in the market place.
  27. stability
    a goalthat seeks to reduce the extreme ups and downs in the standard of living
  28. standard of living
    material well being of an individual, group, or nation measured by the value of good and services used by the average citizen during a given period of time, usually a year.
  29. security
    protecting people agianse povery and supplying them with the means to provide for a medical emergency through an increasing number of government social programs directed among others, to the elderly
  30. equit
    that which is fair and just
  31. invisible hand
    term used by adam smith to describe the effect of competition in guiding individuals toward working for their own self-intrese, thereby achieving the max. good for society.
  32. capitalism
    economic system in ehich individuals own factors of production and decided how to use them within the limits of the law.
  33. free enterprise system
    system in whcih individuals own the Factor of Production and decide how to use them within the limits of the law. AKA capitalism
  34. 3 p's
    private property, profit, and profit incentive.
  35. private property
    whatever is ownder by individuals or groups rather than the government
  36. profit incentives
    desire to make money that motivates people to produce and sell goods and services that others want to buy.
  37. profit
    money left over after the costs of production, wages, arent, intrests, and taxes have been paid.
  38. competition
    ricalry amond producers or sellers of similar goods to wim more business by offering the lowest price or best quality
  39. what affect the decision about what to priduce and how much to produce?
    A society's calues, wants, and needs, limited supplies, scarcity, and supply and demand
  40. what determines the type of economic system a society will have?
    the values of the society and the society's opinion on the priority of each eonomic goal.
  41. compare and contrast the different economic systems
    • Tradition System: values God. does things as the all ways have been done
    • Command System: Values power. does what the government says
    • Market: Values the people. Does what the people want
    • Mixed: Combines Market and Command. Does things within the limits of the law.
    • Similar:they answer the 4 basic questions. The are based on the goals, values, and resources. They all make trade offs. They all have scarces resources
  42. What role does the government play in the Free Enterprise system?
    A limited one. They make laws to protect the people.
  43. Why did the founding Fathers base our economy on freedom
    they Valued freedom and their goal was to give the power to the people
  44. how are we affected by freedom of choice?
    We can buy, sell, produce, make profit, and choose your job
  45. What are the advantages to private property?
    Government can not take land away without paying fair price.
  46. how does profit incentive encourage business in or economy?
    Makes business make goods and services people want to buy.
  47. Why is competition so important to the economy and consumer?
    I makes higher quality and lower prices.
  48. who was the founding father for the Free Enterprise system?
    Adam Smith (Wealth of Nations)
  49. What are the national goals of the american economic system and what element do they have?
    Economic efficiency, Freedom, Security, Predictability,equity, growth, and innovation. These have ethnic, social, and religious elements.
  50. Give some examples of how the government trades off and distributes goods and resources.
    Th government takes taxes. In exchange, they provide welfare, social security, health care, equpitment in emergincies.
  51. Benefits of Free Enterprise
    Economic efficiency, Freedom of choice (decide where you want to work), economic growth (new ideas), high standard of living, private property
  52. What economic rights do you have?
    Right to won property, right to choose where to work, right to go on strick, right to buy and sell, right of free contract
  53. what are your econoic responsibilities?
    open busnesses, provide goods and services, employ others, get a job, get an education, vote, know laws and consequenses.
  54. Nationalization
    The Government owns it
  55. Privatization
    The people own it
  56. welfare state
    blend of capitalism and socialism (sweeden)
  57. what happends when the government regulates things?
    businesses dont like it becuase the have to spend more money abiding by the laws.
Card Set
Things to study for the Free Enterprise unit one test