Ch. 1 - What is Economics? Flashcards
(36 cards)
Capital, 4
The tools, equipment, buildings, and other constructions that businesses use to produce goods and setvices.
Benefit, 8
The benefit of something is the gain of pleasure that it brings and it determined by prefrences.
Economic model, 10
A description of some aspect of the economic world that includes only those features of the world that are needed for the purpose at hand.
Economics, 2
The social science that studies the (choices) that individuals, businesses, governments, and the entire societies make as they cope with (scarcity) and the (incentives) that influence and reconcile those choices.
Efficiency, 5
A situation in which the available resources are used to produce goods and services at the lowest possible cost and in quantities that give the greatest value or benefit.
Entrepreneurship, 4
The human resource that organizes the other three factors of production: labor, land, and capital.
Factors of production, 3
The productive resources used to produce goods and services.
Goods and services, 3
The objects that people value and produce to satisfy human wants.
Human capital, 3
The knowledge and skill that people obtain from education, on-the-job trainning, and work experience.
Incentive, 2
A reward that encourages an action or a penalty that discourages one.
Interest, 4
The income that capital earns.
Labor, 3
The work time and work effort that people devote to producing goods and services.
Land, 3
The “gifts of nature” that we use to produce goods and services.
Macroeconomics, 2
The study of the performance of the national economy and the global economy.
Margin, 9
When a choice is made by comparing a little more of something with its cost, the choice is made at the margin.
Marginal benfit, 9
The benefit that a person receives from consuming one more unit of a good or service. It is measured as the maximum amount that a person is willing to pay for one more unit of the good or service.
Marginal cost, 9
The (opportunity cost) of producing one more unit of a good or service. It is the best alternative forgone. It is calculated as the increase in total cost divided by the increase in output.
Microeconomics, 2
The study of the choices that individuals and businesses make, the way these choices interact in markets, and the influence of governments.
Opportunity cost, 8
The highest-valued alternative that we must give up to get something.
Preferences, 8
A description of a person’s likes and dislikes and the intensity of those feelings.
Profit, 4
The income earned by entrepreneurship.
Rational choice, 8
A choice that compares costs and benefits and achieves the greatest benefit over cost for the person making the choice.
Rent, 4
The income that land earns.
Scarcity, 2
Our inability to satisfy all our wants.
