Economic Questions, Economic System, Circular Flow

hansy784
Flashcards by , created about 6 years ago

SocialStudies (Demand) Flashcards on Economic Questions, Economic System, Circular Flow, created by hansy784 on 10/10/2013.

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hansy784
Created by hansy784 about 6 years ago
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Question Answer
Process in transforming goods into usable forms Production
3 factors of production land labor capital
3 basic economic questions What to Produce? How to Produce? For whom to Produce?
The society must know the people's needs in order to satisfy their needs and wants What to Produce
Refers to the mode of production used How to Produce?
Manual Labor Labor-Intensive Mode
Involves Machinery and tools Capital-Intensive Mode
Its concern is how it will be distributed among the members of the society For Whom to Produce
Set of social institutions that aim to answer the three economic questions Economic System
4 types of economic system Traditional Economy Command Economy Market Economy Mixed Economy
It is based on how things are done in the past, Primitive Traditional Economy
The government dictates what to produce, for whom to produce and how to produce Command Economy
There is no intervention of the government A.K.A Laissez-faire Market Economy
Price Primary mechanism of exchange
There is an intervention of the government but at the same time there is freedom of choice Mixed Market
Composed of individuals who exhibit certain needs and wants Household
Organization that transform resources into products Firms
Firms supply what the household demands Output Market
Household supply what the firms demand Input Market
Refers to natural resources LAND
Composed of people who are involved in the production of goods and service Labor
Composed of man-made that are used to produce other goods Capital
Person who combines capital, land and labor and comes up with the product Entrepreneur