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Economics
Chapter 1 vocab
| Question | Answer |
|---|---|
| Need | something essential for survival |
| Want | something desire but that is not necessary for survival |
| Goods | the physical objects that someone produces |
| Services | the actions or activities that one person performs for another |
| Scarcity | the principle that limited amounts of goods and services are available to meet unlimited wants |
| Economics | the study of how people seek to satisfy their needs and wants by making choices |
| Shortage | a situation in which consumers want more of a good or service than producers are willing to make available at a particular price |
| Entreprenuer | a person who decides how to combine resources to create goods and services |
| Factors of production | the resources that are used to make goods and services |
| Land | all natural resources used to produce goods and services |
| Labor | the effort people devote to tasks for which they are paid |
| Capital | any human-made resource that is used to produce other goods and services |
| Physical capital | human-made objects used to create other goods and services |
| Human capital | the knowledge and skills a worker gains through education and experience |
| Trade-off | the act of giving up one benefit in order to gain another, gather benefit |
| "Guns or butter" | a phrase expressing the idea that a country that describes to produce more military goods ("guns") has fewer resources to produce consumer goods ("butter") and vice versa |
| Opportunity cost | the most desirable alternative given up as the result of a decision |
| Thinking at the margin | the process of deciding whether to do or use one additional unit of some resource |
| Cost/benefit analysis | a decision-making process in which you compare what you will sacrifice and gain by a specific action |
| Marginal cost | the extra cost of adding one unit |
| Marginal benefit | the extra benefit of adding one unit |
| Production possibilities curve | a graph that shows alternative ways to use an economy's productive resources |
| Production possibilities frontier | a line on a production possibilities curve that shows the maximum possible output an economy can produce |
| Efficiency | the use of resources in such a way to maximize the output of goods and services |
| Underutilization | the use of fewer resources than the economy is capable of using |
| Law of increasing costs | an economic principle states that as production shifts from making one item to another, more and more resources are needed to increase production of the second item |
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VKimbrell718
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