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First Quiz
Opp. Cost, Resources, and Imp. People
33
Economics
8th Grade
08/26/2012

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Cards

Term
Scarcity
Definition
a situation where there is not enough to satisfy everybody's wants
Term
The economic problem
Definition
unlimited wants exceed scarce resources
Term
factors of production (definition)
Definition
the resources of inputs into a production process from which an output of goods and services emerges
Term
4 factors of production
Definition
land, labor, capital, and entrepreneurship
Term
What does land include?
Definition
land itself, rives, oceans, animals, plants, ect
Term
what is included in labor?
Definition
covers all human effort (mental and physical)
Term
capital goods
Definition
anything used to make something else (machines, products, roads, ect)
Term
consumer goods
Definition
final product, bought by consumers
Term
human capital
Definition
education, training and expirience that workers have gained. The more they have, the more they are capable of production
Term
entrepreneurship
Definition
the inventors and creators of new products
(give us new products and better products)
Term
opportunity cost
Definition
the alternative to a decision, often a purchase.
EX: you have the choice of buying a computer or an ipod. you buy the ipod. the computer is the opportunity cost.
Term
what role does the consumer have in the economy?
Definition
money is scarce so we have to chose what we want to buy. producers than use the information to determine what to produce and how much to produce. so we decide WHAT is produced and HOW MUCH is produced
Term
Besides what the consumers buy, how do producers decide what to make?
Definition
they produce what gives them maximum profit
Term
what is the job of the government when it comes to opportunity costs?
Definition
they are supposed to spread tax revenues
Term
what does the Production Possibility Curve show?
Definition
it shows the maximum production possible
and the alternative ways to use an economy's resources
Term
In what situation (s) would the PPC increase?
Definition
it ALWAYS increases
Term
What happens when a country is producing inside the PPC?
Definition
the country isnt using all of its resources
Term
What happens when a country is producing outside of the PPC?
Definition
they dont have enough resources to produce what they are producing.
Term
Over time, resources available to an economy, may increase ____________.
Definition
economic growth.
thats when the PPC shifts outward (in order for this to happen, you need more/better resources
Term
What are the 3 economic questions?
Definition
1. What to produce?
2. How to produce?
3. For whom to produce?
Term
economic system
Definition
structure that guides production, allocation, and consumption of goods and services in an economy
Term
economy
Definition
an area in which people make or produce goods and services
Term
market
Definition
made up of all the producers who make and sell particular goods and all consumers willing an able to buy it
Term
traditional economy
Definition
an economic system that relies on habit, custom, or ritual to decide the 3 key economic questions
Term
Capitalism (free market)
Definition
the people (consumers and producers) answer the 3 fundamental questions
Term
Communism (Command Economy)
Definition
the government answers the 3 fundamental questions
Term
mixed economy (socialism)
Definition
an economic system where the government and the people are involved in answering the 3 qs
Term
Who was Hobbes?
Definition
He was the first guy to talk about the government. He created the assumption that people always act in their own rational self interest.
Term
Who was Adam Smith?
Definition
created capitalism and the idea of "invisible hand"
Term
Who was Ricardo?
Definition
he said that countries should specialize in one thing (what they are good at) and then trade with other countries.
Term
Who was Keynes?
Definition
large-scale deficit spending by the government is needed to fix a recession
Term
Who was Hayek?
Definition
Defended capitalism, wanted little government involvement
Term
Who was Friedman?
Definition
friends with Hayek; defended capitalism
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