| A | B |
|---|
| 3 economic questions | what to produce, how to produce, for whom to produce |
| examples of needs | bread, coat, house |
| wants | unlimited and ever changing |
| 4 factors of production | land, labor, capital, entrepreneurship |
| laissez faire | government stays out of business |
| elasticity of demand | demand continues even when to price rises |
| entrpreneurs | take risks |
| opportunity cost | the value of what you give up (the next best choice) |
| marginal beeifit | satisfaction received from one more unit of a good or service |
| marco economics | study of the economy as a whole |
| micro economics | sstudy of the ecoonomy on an individual basis |
| scarcity | there are not enough resources to meet human needs |
| Adam Smith | wrote A Wealth of Nations, believed in free trade |
| producer | makes goods, provides services |
| traditional economy | people make economic decisions based on customs and beliefs |
| market economy | economy based on individual choice |
| command economy | economy in which government makes all decisions |
| communism | economy with no private ownership and no political freedom |
| supply | the willingness and ability of a producer to produce and sell a product |
| factors necessary for demand | desire for a good and the $ to pay for it |
| normal goods | people demand more when their income rises |
| inferior goods | people demand less when their income rises |
| capitalism | an economic system based on private ownership of the factors of production |
