Economics and Free Enterprise

The fundamental economic problem.

Karl Marx advocated this type of economy.

Social science concerned with how people make unlimited choices with limited resources.

Economic Goal: The desire for an economy to create more goods and services in the future.

The value of the next best alternative when one choice is made over another.

Factor of Production: Goods used to produce other goods and services.

Economic Goal: Employees and customers should be treated fairly, and not taken advantage of.

Economic Goal: Being able to buy what we choose and to work where we want.

Factor of Production: All human efforts that go into the production of a good or service.

Period of at least 6 consecutive months when GDP does not increase.

The quantity produced per worker per hour.

Economy composed of elements of other economic systems.

Factors of Production: Gifts of nature.

Struggle between companies for customers.

Economic decisions are made by producers and consumers acting in their own self interest.

Economic Goal: The government makes a huge effort to fight inflation.

The father of modern economics, he wrote The Wealth of Nations.

Economic decisions are made by the government or some central authority.

Factor of Production: The "extra" or fourth factor of production we talked about in class.

Economic Goal: The government tries to protect people from adverse economic conditions.