Fundamentals of Economics Vocab 2

the inability to satisfy all wants at the same time. All resources and goods are limited. Limited goods and resources require that choices be made

• economics

• scarcity

• resources

• choice

Factors of production that come from the earth and are used in the production of goods and services

• economics

• pohysical capital

• natural resources

• human capital

selection of an item or action from a set of possible alternatives

• economics

• scarcity

• resources

• choice

what is given up when a choice is made (the second-best alternative)

• opportunity cost

• production

• consumption

• resources

the using of goods and services

• opportunity cost

• production

• consumption

• resources

based on supply and demand with little or no government control

• traditional economy

• mixed economy

• command economy

• free market economy

an economy in which production, investment, prices, and incomes are determined centrally by a government

• traditional economy

• mixed economy

• command economy

• free market economy

an economic system combining private and public enterprise

• traditional economy

• mixed economy

• command economy

• free market economy

A person who takes a risk to produce and sell goods and services in search of profit

• proprietorship

• partnership

• corporation

• entrepreneur

What is a disadvantage of a market economy?

• It can lead to economic inequalities.

• It discourages competition.

• It limits consumer choice.

• It restricts personal freedom.