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26 Cards in this Set
- Front
- Back
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Economics
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the production, distribution, and consumption of goods and services within our world, countries, and communities
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Scarcity
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insufficient amounts of resources to meet the demand |
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Opportunity Cost
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what is lost by not choosing something |
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Microeconomics |
study of economics on a small scale |
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Macroeconomics |
study of economics on a large scale |
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Four types of economics |
Traditional, Mixed, Command, Market |
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Traditional Economy |
an economic system based on the customs and traditions of a society |
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Command Economy |
an economic system that is commanded and owned solely by a central authority |
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Market Economy |
an economic system controlled by individuals participating in a free market |
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Mixed Economy |
an economic system that allows for the simultaneous operation of publicly and privately owned enterprises by mixing elements of command and market economics |
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Three types of mixed economy
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Capitalism, Democratic Socialism, Authoritarian Socialism |
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Consumer Sovereignty
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the power of the consumer to control what is produced |
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Advantages of a free market
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More efficient, Encourages growth, Diversity of goods |
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Command Economy |
No consumer sovereignty |
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Problems with a centrally planned economy |
diminished production, poorly produced goods & services, shortages of non-priority goods & services, very expensive to run |
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Laissez-faire |
an economic principle that opposes any government regulation in the economy |
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Microeconomics focuses on:
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supply and demand as well as the consumers and producers that are willing to demand or supply goods |
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Utility Theory |
serves as a way to determine the satisfaction received from the consumption of goods |
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Law of diminishing marginal utility |
as a consumer increases consumption of a good, the marginal utility received from that good decreases |
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Total Utility
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total satisfaction, or sum amount of utility, a consumer gets from consuming units of a good or service |
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Consumer Equilibrium |
maximizing total utility in the goods or services bought |
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Consumer's Problem |
the difficulty in maximizing total utility with budget constraints |
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Law of demand |
an increase in the price of a good will lead to a decrease in consumer demand; a decrease in the price of a good will lead to an increase in consumer demand |
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Demand schedule
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a table or list of a good and the amount that consumers are willing to buy at various prices |
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Demand curve |
a graphic representation of a demand schedule which represents the relationship between price and demand |
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