Understanding Economics: Key Concepts Flashcard

Front

What is the relationship between scarcity, trade-offs, and opportunity cost?

Back

Scarcity forces individuals to make trade-offs, which results in an opportunity cost for every decision you make.

Front

Which of the following best describes the relationship between goods, services, consumers, and producers? Options: Consumers produce goods and services for producers. Producers use goods and that consumers provide. Producers create goods and services that consumers use.

Back

Producers create goods and services that consumers use.

Front

How does a market economy differ from a command economy in terms of meeting people's wants and needs?

Back

A market economy allows people to decide how to meet their wants and needs, while a command economy lets the government decide what the people need and want.

Front

Which of the following is a characteristic of a free market economy? Prices determined by supply and demand. Fixed prices set by the government. Limited consumer choice.

Back

Prices determined by supply and demand.

Front

Which of the following is an example of a good and a service? A smartphone and a haircut.

Back

A smartphone and a haircut.

Front

Which of the following is an example of a need and a want? Water and designer clothes.

Back

Water and designer clothes.

Front

Why is it important to recognize the difference between a need and a want for your financial future?

Back

It helps you budget and financial planning by prioritizing needs over wants.

Front

If you spend your money on a concert ticket, you might be not being able to buy a new pair of shoes with that same money. What is the opportunity cost of your decision?

Back

buying a new pair of shoes