Basics of Economics

High unemployment shouls be turned into low unemployment is a ... goal.

It is the act of using resources to satisfy current needs and wants.

• Substitute

• Production

• Opportunity cost

• Consumption

When supply of a resource cannot meet demand.

• Scarcity

• Factors of production

• Opportunity cost

• Debt

These are similar to product markets but refer to the components that are required for production, not just the products.

• Households

• Producers

• Consumers

• Resource market

What are the factors of production?

• Labour, land, capital, entrepreneurship

• Consumers, Producers

• Households, companies

• Supply and demand

This economy is controlled and coordinated by the state.

• Planned economy

• Market economy

• Mixed economy

• Traditional economy

Production and allocation of resources are prescribed by the state.

• Traditional economy

• Mixed economy

• Command economy

• Market economy

Resources are allocated through the price mechanism.

• Mixed economy

• Planned economy

• Market economy

• Traditional economy

The second ingredient is the desire to earn profits.

• Command economy

• Market economy

• Traditional economy

• Mixed economy

The profit motive gives sellers the incentive to produce at the .... possible cost.