quiz 1
Terms
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- goods
- physical objects such as clothes or shoes
- economics
- the study of how people seek to satisfy their needs and wants by making choices
- command economy
- economic system in which a central authority is in command of the economy; a centrally planned economy
- incentive
- an expectation that encourages ppl to behave in a certain way
- capital
- any human-made resources that is used to create other goods and services
- centrally planned economy
- economic system in which the central government makes all decisions on the production and consumption of goods and services
- opportunity costs
- the most desirable alternative given up as the result of a decision
- laissez faire
- the doctrine that government generally should not intervene in the marketplace
- scarcity
- limited quantities of resources to meet unlimited wants
- safety net
- government programs that protect ppl experiencing unfavorable ecnomic conditions
- want
- an item that we desire but that is not essential to survival
- microeconomics
- the study of economics behavior and decision making of small units, such as individuals family and businesses
- welfare
- government aid to the poor
- gross domestic product
- the total value of all final goods and services produced in a partticular economy
- need
- something like air, food, or shelter that is necessary for survival
- private property
- property owned by individuals or companies, not by the government or the ppl as a whole
- traditional economy
- economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services
- mixed economy
- market-based economic system with limited government involvement
- land
- natural resources that are used to make goods and services
- macroeconomics
- the study of the behavior and decision making of entire economics
- market economy
- economic system in which decisions on production are made by individuals and are based on exchange, or trade
- trade-off
- an alternative that we sacrifice when we make a decision
- labor
- the effort that ppl devote to a task for which they are paid
- specialization
- the concentration of the productive efforts of individuals and firms on a limited number of activities
- poverty threshold
- an income level that which is needed to support families or households
- production possibilities curve
- a graph that shows alternative ways to use an economy's resources
- thinking at the margin
- deciding whether to do or use one additional unit of some resource
- invisible hand
- term economists use to describe the self- regulating nature of the marketplace
- market failure
- a situation in which the market does not distribute resources efficiently
- externality
- an economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume