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Related Flashcards
Related Topics
Cards In This Set
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Economic questions that must be answered to give people the products they want
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How should the goods be produced?
What goods should be produced? For whom will the goods be produced? |
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By specializing in one kind of product or service, a business (specialization)
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Increase worker efficiency and productivity.
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When does scarcity occur?
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When citizens have a shortage of resources
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What is the term for the exchange of money for the purchase of goods and services?
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A trade-off
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Opportunity Cost
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The next best choice. Also, the option you gave up. If you buy a cd and can't afford the stereo for example, the stereo is your opportunity cost.
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Fixed Costs
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Costs that don't change. Always stay the same. Ex: Mortgage payments.
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Division of labor improves productivity by
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Breaking jobs down into separate tasks.
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Factors of Production
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The resources necessary to produce goods and services
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Features of Capitalism
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Private property rights, competition, consumer sovereignty.
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Right to choose for consumers
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The right to shop where they please
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The consumer sector
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Is only affected by the product market according to the circular flow of activity.
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Entrepreneurs affect the economy by
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Starting new businesses and introducing new products.
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For a business owner, an acceptable trade-off might include
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Paying higher wages and receiving higher worker productivity.
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Investing in human capital
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Likely to result in higher-quality products and increased profits
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Scarcity of Goods
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There will always be wants not fullfilled
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