What are three weaknesses of a Command Economy?
No adaptation, no rewards, no innovation, give up rights, poor quality
In which economic system is equality nearly impossible to achieve?
Free Market
What is a "Net Zero" benefit and is it desirable or not?
The cost and benefits are equal, yes it is considered a good thing
Unlimited needs and wants combined with limited resources create what condition?
Scarcity
Give a weakness of the Traditional Economic System.
No innovation, unable to change, No support in difficult times
What is a public good?
a shared good or service for which it would be inefficient or impractical
What governments are command economies associated with?
Socialist or Communist
What is the primary factor in determining whether something gets produced in a mixed economy?
Cost
When do Command Economies typically arise?
Following severe economic depressions
What is Marginal Benefit?
the benefit associated with that one additional item.
Explain why the government controls certain things in a Mixed Economy.
What is Marginal Cost?
the cost of procuring one more item. (Of making one more thing, deciding to do one more thing,)
A professional Baseball Player's bat is an example of what Factor of Production?
Capital
Bartering and trades are characteristics of what economic system?
Traditional
What is one common problem in a mixed economy?
The Free Rider Problem
What is labor?
Any effort a person devotes to a task for which that person is paid.
What are the three questions every economic system must answer?
Who? How? For whom?
What is entrepreneur (as it applies to economics)?
A person who assembles the factors of production to create new goods and services.
In which economy does the government answer the economic questions?
Command
In a Free Market system, who answers the economic questions?
Business Owners and Individuals
What does the government offer in a Mixed Economy?
Government offers protections (property rights, patents, minimum wage)
What is Capital?
Any human-made resource that is used to create other goods and services.
What is it called when one weighs the cost and benefits of an economic decision?
Marginal Analysis
What are the benefits of "specialization?"
Expertise, Efficiency, Education
Name all 4 factors of production
Land, Labor, Capital, Entrepreneur
Define the "Invisible Hand" theory.
Consumers get the products they want at prices that closely reflect the cost of providing them.
Definition: workers gain experience in one particular part of the production process, the entire factory is able to produce more without increasing the number of workers it employs or the time each employee spends on the job
Division of Labor
What does the consumer give up in a mixed economy?
Taxes
What is it called when a worker concentrates on one job or one aspect of their job?
Specialization
What is Economics?
The study of how people satisfy unlimited needs and wants with limited resources.
What is a mixed economy?
Blend market economy with some government intervention (some more than others)
Name 4 of the countries highlighted that have a Command Economy
Iran, Libya, N. Korea, Cube, Turkmenistan, Belarus, Laos, Myanmar
What does the production possibilities graph show?
alternative ways to use an economy’s productive resources
What is a "trade off" in Economics?
The things we don't choose/buy or the alternatives.
What is land?
All of the natural resources that are used to produce goods and services.
Name the 4 entities involved in the Circular Flow Model of a Free Market system
Household, Product Markets, Firms, Factor Markets
What is a Market?
The mechanism to buy and sell things
What is a current example of a true Free Market Economy?
Hong Kong or Singapore
Why is a Mixed economy used?
The market on its own cannot meet all needs (national defense, roads/bridges)
Define voluntary exchange
The act of buyers and sellers freely and willingly engaging in market transactions
What is the opportunity cost of choosing to buy a car over a house?
The ability to have your own home/shelter
What is opportunity cost?
the most desirable alternative given up as the result of a decision
Give an example of what each factor of production might be in the production of tires.
Rubber, Machine, workers, company owner
Products remain the same and people often do the same jobs as their parents is distinctive of what economic system?
Traditional