Economics Basic Concepts

What is economics?

• The study of money flow in an economy

• The study of people and their choices

• The study of supply and demand

• The study of consumers and producers

Supply would be defined as...

• The amount of product needed to start a business

• The amount of money made after selling a product

• The amount of a good or service that is sellers are willing and able to sell

• The amount of a good or service that buyers are willing to buy

Demand would be defined as...

• Consumer's need to have a good or service

• When a consumer really wants something

• Consumer’s desire and willingness to pay a certain price for a specific good or service

• Consumer's buying habits in a market economy

A consumer would be best defined as...

• A person who purchases goods and services for personal use

• A business that consumes other businesses

• A business or person who creates a product to sell

• A person who purchases goods in order to resell them.

A producer would best be described as...

• A person, business or country that consumes products others sell

• A business that creates everything

• A person, business or country that contributes to the economy

• A person, business or country that creates goods or services for sale

When producers are free to decide what to produce, and consumers are free to buy whatever they need and want this is known as what type of economy?

• Free Economy

• Market Economy

• Command Economy

• American Economy

What two things will competition always lead to in a market economy?

• Better quality products and lower prices

• Innovation and higher prices

• More incentives and higher profit

• Fewer choices

When there is a limited amount of resources available.

• Supply

• Command Economy

• Opportunity Cost

• Scarcity

Something that motivates people to behave a certain way.

• Innovation

• Competition

• Incentive

• Demand

The benefit you give up by choosing one thing over another.

• Opportunity Cost

• Profit

• Scarcity

• Producers