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22 Cards in this Set
- Front
- Back
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What are the 4 factors of production?
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Land
Labor Capital (Investment goods) Entrepreneurial Ability |
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What are the 4 responsibilities of an entrepreneur?
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1) Takes initiative
2) Makes strategic decisions 3) Innovator 4) Risk bearer |
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What are the 4 resource payments?
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Rent
Wages Interest Profits |
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Full employment means?
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Us eof all available resources
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Productive efficiency?
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Production of G+S thru LEAST COSTLY WAY
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Allocative Efficiency?
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Least-cost production of THOSE G+S that provide MAXIMUM SATISFACTION OF ECONOMY'S WANTS.
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Production Possibilities Model assumes what 4 things?
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1) Full employment and productive efficiency
2) Fixed resources 3) Fixed technology 4) Only two goods produced in economy: Consumer (Pizza) and Capital (Robots) |
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Number 1 Economizing Problem (Think 'lunch')
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There is no such thing as a free lunch.
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Production Frontier?
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Shows the limits of attainable outputs
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Law of Increasing Opportunity Costs?
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The more of a product that is produced, the greater is its opportunity cost ("marginal" being implied)
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Problem with Adaptability?
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Economic Resources are not completely adaptable to alternative uses
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Increases in Economic Growth due to:
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1) Increases in Technology
2) Increases in Quantity and Quality of Resources |
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What 2 international factors enable a nation to obtain more goods than its PPC indicates?
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International Trade
International Specilization |
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What are the 2 types of economic systems?
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Market System
Command System |
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Market System?
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·Capitalism
- Private individuals own most resources and markets coordiante most economic activity |
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Command System?
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·Socialism, Communism
- Government owns most resources and central planners coordinate most economic activity |
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4 contributors to Cicular Flow Model (from top and clockwise)?
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Resource Market
Households Product Market Businesses |
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Flow of Circular Flow Model?
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From Resource Market, Money income flows clockwise
From Resource Market, Resources flow (real flow) counterclockwise |
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Relationship btwn Households and Resource Market
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Households give Resources to Market in exchange for Income
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Relationship btwn Households and Product Market
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Product Market sells the products in exchange for Consumption Expenditures
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Relationship btwn Businesses and Resource Market
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Businesses pay costs of resources in exchange for resources
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Relationship btwn Businesses and Product Market
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Businesses give G+S (aka products) in exchange for Revenue
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