Economics Flashcards

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Questions and Answers

What is scarcity?

Abundance of goods

Amount of resources available

Limited supply of something (correct)

Unlimited supply of something

What are the three basic economic questions?

What to produce? How to produce it? Who will consume it?

What characterizes a traditional economy?

Heavy reliance on technology

Focus on profit maximization

Based on traditions, customs, and beliefs (correct)

Decisions made by government

What is bartering?

Trading without using money Signup and view all the answers

Give examples of traditional economies.

Villages in Africa and South America, Inuit in Canada, Aborigines in Australia Signup and view all the answers

What is a command economy?

All economic decisions made by the government Signup and view all the answers

Name examples of command economies.

Cuba, North Korea, Former Soviet Union, East Germany Signup and view all the answers

What defines a market economy?

Private citizens make economic decisions Signup and view all the answers

What is free enterprise?

Competition between companies that can shift prices of goods/services Signup and view all the answers

What is a mixed economy?

Includes characteristics of both command and market economies Signup and view all the answers

What is human capital?

Skilled human worker Signup and view all the answers

Define capital resources.

Anything used to make a finished product Signup and view all the answers

What are natural resources?

A resource that comes from the earth Signup and view all the answers

What is specialization?

Producing something cheaply and easily Signup and view all the answers

What does import mean?

Goods coming into a country Signup and view all the answers

What does export mean?

Goods leaving a country Signup and view all the answers

What is a quota?

Limit on the amount of goods coming into a country Signup and view all the answers

What is an embargo?

Ban on trade Signup and view all the answers

Define tariff.

Taxes on imported goods Signup and view all the answers

Why do countries place embargoes on other countries?

Because they disagree on political issues and intend to hurt another country economically. Signup and view all the answers

What are three trade barriers?

Tariff, embargo, quota Signup and view all the answers

What are physical trade barriers?

Natural barriers that slow down trade: deserts and mountains. Signup and view all the answers

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.

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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!