Questions and Answers
What can be traded for goods or services?
What is the term for anything that has value that can be touched?
Goods
What is a job done for money called?
Services
What happens when there is too much money and it becomes worthless?
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What is the way goods and services are produced, bought, and sold?
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What term describes how much is available?
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What term describes how much people want?
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What is an economic system in which people choose freely what to buy and sell called?
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What is an economic system in which the government makes all economic decisions?
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What describes an economy where production is based on customs and traditions?
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What is a market-based economic system with limited government involvement?
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What term refers to how much an item costs?
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What do we call economies that are rich and have many industries and factories?
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What do we call economies that are poorer and trying to become developed?
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What do we call resources that can be used again or brought back?
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What do we call resources that cannot be brought back or used again?
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What term describes when there is not enough of something to satisfy how much everyone wants?
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What is a measure of how well people live?
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What is the principle that suppliers will normally offer more for sale at high prices?
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What describes the quantity demanded of a good or service varying inversely with its price?
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What are referred to as 'gifts of nature' or natural resources not created by humans?
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What is the term for the tools, equipment, machinery, and factories used in production?
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What do we call people with all of their abilities, efforts, and skills?
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What is the process of creating goods and services called?
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What are the resources required to produce goods and services called?
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What do we call a risk-taking individual in search of profits who does something new with existing resources?
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What is the dollar value of all final goods and services produced within a country's borders in a 12 month period?
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What do we call it when a nation's total output of goods and services increases over time?
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What term describes the alternative choices people face in making an economic decision?
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What is the cost of the next best alternative called?
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What do we call things you would like to have but are not necessary for survival?
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What is something necessary for survival?
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What do we call a situation in which a good or service is unavailable?
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What are the three economic questions?
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Study Notes
Key Economic Concepts
- Money: A medium of exchange for goods and services.
- Goods: Tangible items that have value and can be touched.
- Services: Intangible tasks performed for payment.
- Inflation: Situations where excessive money supply leads to devaluation, making money less valuable.
- Economy: The system governing the production, distribution, and consumption of goods and services.
Supply and Demand
- Supply: The total amount of a product or service available for consumption.
- Demand: The desire and willingness of consumers to purchase goods and services.
- Law of Supply: Higher prices encourage producers to offer more for sale; lower prices decrease supply.
- Law of Demand: Higher prices typically reduce the quantity demanded, while lower prices increase it.
Economic Systems
- Market Economy: Economic decisions are made by individuals based on supply and demand.
- Command Economy: The government makes all economic decisions regarding production and distribution.
- Traditional Economy: Economic roles and production methods are based on customs and past practices.
- Mixed Economy: Combines elements of both market and command economies, allowing for limited government intervention.
Types of Economies
- Developed Economies: Characterized by wealth, advanced industries, and high standards of living.
- Developing Economies: Economies that are poorer and in transition towards industrialization and higher incomes.
Resources
- Renewable Resources: Resources that can be replenished naturally over time, such as forests and solar energy.
- Non-renewable Resources: Finite resources that cannot be reused or regenerated, like fossil fuels.
Fundamental Economic Issues
- Scarcity: The fundamental economic problem arising from limited resources unable to meet unlimited wants and needs.
- Standard of Living: A measure of the quality of life, often linked to wealth, comfort, and access to necessities.
Production Factors
- Factors of Production: The resources required for the creation of goods and services, including land, labor, capital, and entrepreneurship.
- Labor: The human effort and skills used in the production of goods and services.
- Capital: Physical tools, equipment, and buildings utilized in the production process.
- Entrepreneurs: Individuals who take risks to create new businesses and innovate using available resources.
Economic Metrics
- Gross Domestic Product (GDP): A measure of a nation's economic activity, reflecting the total dollar value of all final goods and services produced within a country's borders in one year.
- Economic Growth: The increase in a country's output over time, indicative of improving economic health.
Decision-making and Trade-offs
- Trade-offs: The alternatives one faces when making an economic decision, as choosing one option usually means sacrificing another.
- Opportunity Cost: The cost associated with foregone alternatives when making a decision, quantifying the value of the next best choice.
Basic Needs and Wants
- Needs: Essential items required for survival, such as food, water, and shelter.
- Wants: Non-essential desires that improve quality of life but are not necessary for survival.
Market Dynamics
- Shortage: A temporary condition where demand for a good or service exceeds its supply, leading to unavailability.
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Three Economic Questions: Fundamental inquiries every economy must address:
- What goods and services should be produced?
- How should these goods and services be produced?
- For whom should these goods and services be produced?
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Description
Test your knowledge of key economic terms with this flashcard quiz. Learn definitions and understand the concepts related to money, goods, services, inflation, and the economy. Perfect for students or anyone interested in economics!
