Economics Review :: Economics Cheat Sheet

Economics ReviewChapter 1Section 11. Economics study of how individuals & nations break choices about ways to purpose scarce resources to fulfill their needs & wants.2. Scarcity state in which people dont & cannot have enough income, time, or other resources to satisfy.3. Factors of return resources of land, labor, capital, & entrepreneurship used to produce goods & services.4. Entrepreneurship ability to start new businesses, to introduce new products, & techniques.Section 21. Trade-off exchanging one thing for the use of another, often making unavoidable choices because of the problem of scarcity.2. Opportunity cost rank of the next best alternative given up for the alternative that was chosen.Section 31. Economy all activity in a nation that affects the production, distribution, & use of goods & services.2. Economic model simplified representation of the real world which shows peoples reactions to changes in the economy theory.3. Values beliefs or characteristics that an individual or group considers important.Chapter 2Section 11. Traditional economic system economic systems argon based on customs, beliefs, & ways of doing things that have been passed down from generation to generation.2. Command economic system the government controls the factors of production & consecrates all decisions about their use also called controlled economy.3. Market economic system individuals own the factors of production & make economic decisions through free interaction government doesnt intervene.4. Distribution of income money salary for work, the amount of health care, education, food, & so on, that each person receives distribution of goods & services among all members of an economic system.Section 21. Capitalism private individuals own the factors of production and dissolve how to use them within the limits of the law market economic system & free enterprise system.2. Free enterprise system individuals own the factors of production & decide how to use them within legal limits.3. Profit money left after all the costs of production wages, rent, interest, & taxes have been paid.4. Profit incentive desire to make money that motivates people to produce & sell goods & services that others ant to buy.5. Competition rivalry among producers or sellers of similar goods to win more business by go the lowest prices or better quality.Section 31. Standard of living material well-being of an individual, group, or nation measured by the average value of goods & services used by the average citizen during a given period of time.