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Unit 1 - Foundations of Economics.
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Unit 1 - Foundations of Economics.
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Unit 1 - Foundations of EconomicsAdam Smith - ANS-Known as the "Father of Capitalism". Published The Wealth of
Nations in 1776.
Capital - ANS-Any human-made resource that is used to produce other goods and
services.
Capitalism - ANS-An economic and political system supported by Adam Smith, in which
a country's trade and industry are controlled by private owners for profit. This is an
example of a market economy.
Command Economy/Centrally Planned Economy - ANS-An economic system in which
the government controls a country's economy and makes all economic decisions on the
three key economic questions.
Communism - ANS-a political system in which the government owns and controls all
resources and means of production and makes all economic decisions.
Comparative Advantage - ANS-The ability of an individual, firm, or country to produce a
good or service at a lower cost than other producers.
Cost-Benefit analysis - ANS-Economic model that compares the costs and benefits of a
decision.
Demand - ANS-The quantity of something that consumers are willing and able to buy
Economic systems - ANS-The structure of methods and principles that a society uses to
produce and distribute goods and services.
Economics - ANS-The study of how people seek to satisfy their needs and wants by
making choices.
Efficiency - ANS-Using resources in such a way as to maximize the output of goods and
services.
Entrepreneur - ANS-A person that decides how to combine resources to create goods
and services.
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