Economics Flashcards

Study Notes

Economic Concepts

Scarcity: The fundamental concept in economics referring to the limited availability of resources, driving the need for economic choices.
Three Basic Economic Questions: Essential queries that guide economic decision-making:
- What to produce?
- How to produce it?
- Who will consume it?

Economic Systems

Traditional Economy: An economic system rooted in historical customs and practices, with production methods passed down through generations, often relying on bartering.
Bartering: A system of trade involving the exchange of goods and services without the use of money.
Examples of Traditional Economy: Found in communities like:
- Villages in Africa and South America
- Inuit tribes in Canada
- Aborigines in Australia
Command Economy: An economic model where the government dictates all economic activities, controlling production, prices, and wages.
Examples of Command Economy: Countries where the government manages the economy include:
- Cuba
- North Korea
- Former Soviet Union
- East Germany, all exhibiting communist governance.
Market Economy: An economic model characterized by decisions influenced by supply and demand, with minimal government intervention, allowing private citizens to answer all economic questions.
Free Enterprise: A hallmark of market economies allowing competition among businesses, impacting pricing for goods and services.
Mixed Economy: An economic system incorporating elements from both command and market economies, balancing government control and private enterprise.

Economic Resources

Human Capital: Refers to skilled and knowledgeable workers, contributing to productivity and economic strength.
Capital Resources: Inputs utilized in the production of finished goods, encompassing tools, machinery, and buildings.
Natural Resources: Raw materials sourced from the earth, essential for production processes.
Specialization: The focused production of specific goods or services, leading to efficiency and lower costs.

Trade Dynamics

Import: Goods that enter a country from abroad, contributing to domestic availability.
Export: Goods that are sent out of a country for trading purposes, generating revenue.
Quota: A regulatory limit placed on the number of goods that can be imported into a country.
Embargo: A governmental prohibition on trade with specific countries, often instituted for political reasons.
Tariff: Taxes imposed on imported goods, influencing pricing and trade volumes.

Trade Barriers

Reasons for Embargoes: Countries may impose trade bans due to:
- Political disagreements
- Desire for specific policy changes
- Economic pressure on another nation.
Types of Trade Barriers:
- Tariff
- Embargo
- Quota
Physical Trade Barriers: Natural obstacles that hinder trade activities, such as deserts and mountains, exemplified by the Sahara Desert and the Swiss Alps.

Description

Test your understanding of key economic concepts with these flashcards. From scarcity to traditional economies, this quiz covers fundamental ideas that are crucial for grasping the basics of economics. Perfect for students and anyone looking to refresh their knowledge!