Studied by 2 peoplescarcity
scarce resources satisfy needs and wants
resources
land, labor, and capital
macroeconomic solution to scarcity
enhancing resources through investment
saving
loaning money to earn interest
investing
buying capital
comparative advantage
lower opportunity cost
absolute advantage
who has more stuff (who can produce more)
market system
resources owned privately
personal gain dictates resource use
efficient outcomes
command system
government owns all resources
no profit/personal gain motive
planned resource use - inefficient outcomes
mixed system
public and private ownership of resources
households buy goods + services from the
product market
households supply resources (LLC) to the
factor market
the factor market buys resources from
businesses
the factor market sells LLC to
households
businesses buy resources from the
factor market
businesses supply rent, wages, & interest to the
factor market
the product market buys goods + services from
businesses
the product market supplies payments to
businesses
households buy goods + services from the
product market
price floor
minimum price (price too high)
creates surplus
price ceiling
maximum price (price too low)
creates shortage
supply curve
supply of savings
demand curve
demand to borrow money for investment
quantity
level of investment in the economy
Note
Flashcard