Economics Final Review

Front

What are the three basic questions of economics?

Back

What to produce?

How to produce?

For whom to produce?

Front

What are the four kinds of goods?

Back

Durable - lasts 3+ years

Nondurable - lasts less than 3 years

Consumer - intended for final use by consumer

Commercial - used by business to produce other goods

Front

What is T.I.N.S.T.A.A.F.L.?

Back

There is no such thing as a free lunch.

Everything has a cost even if it is "free"

Front

What are the four factors of production?

Back

Land

Labor

Capital

Entrepreneurship

Front

What is opportunity cost?

Back

The value of the next best alternative given up

(for example, you buy shoes and now you don't have money for a jacket. The jacket is your opportunity cost of buying shoes)

Front

What is the product market?

Back

Where businesses sell goods and services to individuals

Front

What is the factor market?

Back

Where individuals sell the factors of production to businesses

Front

What is a traditional economy?

Back

Use of resources stems from habit, ritual, or custom

Front

What is a command economy?

Back

A central authority makes the major decisions about what, how, and for whom to produce

Front

What is a market economy?

Back

What, how, and for whom are primarily answered by people who make supply and demand decisions in their own best interest