Economics Flashcards

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Four Factors of Production

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Land, capital, labor, and entrepreneurship

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Economics

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A social science because it deals with how people behave while trying to satisfy their needs and wants through use of relatively scarce resources.

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Capitalism

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A competitive economic system in which private citizens own the factors of production.

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Voluntary Exchange

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A characteristic of market/mixed economies.

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Limited Liability

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One characteristic of the corporate form of business organization.

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Marginal Utility

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Describes the additional satisfaction a consumer receives with the purchase of each additional unit.

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Law of Demand

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States that more of a product will be purchased at low prices than at high ones.

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Market Equilibrium

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The situation in which the quantity of output supplied is equal to the quantity demanded.

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Effective Taxes Criteria

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The three criteria are equity, complexity, and efficiency.

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Principles of Taxation

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The Two Principles are the benefit principle and the ability-to-pay principle.