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Economics (Vocab (resources - supplies of value for production #, consumer…
Economics
Vocab
resources - supplies of value for production #
consumer - those who buy or use goods and services #
good - an item that is produced, sold, and bought by consumers #
producer - a company or individual who provides goods and services #
scarce - in limited quantity compared to demand #
service - an action completed for consumers #
allocate - to distribute something among those who need or want it #
nonrenewable resource - a resource that, once used, is no longer available #
renewable resource - a resource that can be replenished after use #
scarcity - the idea that all resources are limited and insufficient to meet unlimited wants and needs #
value - the worth of an item in in consideration with goods, services, or money #
factors of production - resources needed to produce a good or service # #
limited - restricted within boundaries #
needs - goods that are necessities for survival and health #
wants - goods that are desired despite not being needed for survival #
opportunity cost - the principle that one opportunity must be given up in order to consume or produce another # #
production cost - the total amount need to produce a good or service #
production possibility curve - a representation of the combination of goods and services that can be produced in a situation #
profit - income received from an economic action, minus the costs of taking the action #
revenue - the total income received from an economic action # #
closed economy - an economy that operates without imports or exports as part of a self-sufficient community #
command economy - an economy in which the government determines production, prices and income #
mixed market economy - an economy that has some government intervention #
pure market economy - an economy in which goods are produced and sold privately, with no government interaction #
regulate - to govern by providing guides and limitations #
traditional economy - an economy based on custom or tradition of a family or community #
Intro
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What is Economics?
economics - the study of producing and consuming goods and services # #
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Markets and Choices
Governments can allow the freedom to make economic choices, create regulations for producers and consumers, or strictly regulate the economy.
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The Three Questions of Economics #
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Consider what people want, which resources are available, and how to use those resources.
Who to produce for?
Consider who has the greatest want or need, who is in a position of authority, and who has the greatest ability to pay.
Consider how they are traditionally made, how they can be produced at a lower cost and/or a higher quality, and how to make the biggest profit.
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Opportunity Cost
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Every time a choice is made to take an action, an opportunity must be given up.
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Producers
Must consider revenue, production cost, and profit.
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