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Economics Chapter 1
vocabulary
Term | Definition |
---|---|
Need | Something essential for survival |
Want | something that people 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 |
entrepreneur | 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 |
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 | the 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, greater benefit |
guns or butter | a phrase expressing the idea that a country that decides to produce more military goods has fewer resources to produce consumer goods and vice versa |
opportunity cost | the most desirable alternative given up as the result of a decision |
efficiency | the use of resources in such a way as to maximize the output of goods and services |