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Flashcards in Chapter 1 Deck (29):
0

Must be made between one item in another and must go through a process

The biggest problem in economics

Scarcity

1

Actual tangible things we buy

Goods

2

In tangible things we buy

Services

3

Natural resources and materials needed to produce

Land

4

Physical work needed to produce

Labor

5

Skills and knowledge education

Human capital

6

Machines and tools buildings

Physical capital

7

The ideas and risks needed to start business

Entrepreneurship

8

Costs you can actually see and Count when you make an economic decision

Explicit cost

9

Hidden costs thought as something that is given up in order to gain something else

Implicit cost

10

Total cost of a decision on next best alternative not chosen

Opportunity cost

11

The amount of happiness gained by making a choice

Utility

12

Allows people to measure the cost of something against the value of the utility gained when the action is taken

Cost-benefit analysis

13

Utility must be equal to or exceed opportunity cost

The maximization rule

14

Getting more output with a lesser amount of inputs

Efficiency

15

When utility is increased due to the mass production of items lowering cost

Economic growth

16

A worker specializes in a specific task in making something or on a specific career

Specialization

17

Dividing the completion of a job into several basic tasks it takes to create something

Division of labor

18

Produced and meant to be consumed or used up

Consumer goods

19

A graphical representation of a society's total ability to produce using all of its resources

Production possibilities frontier

20

A collection of rules values laws and activities that can help to explain how different societies deal with the basic problem of scarcity

Economic system

21

Economic decisions are made by tradition through past practice over many generations

Traditional economy

22

Major economic decisions are made by central planning Authority

Command economy

23

Economic decisions are made by individuals

Market economy

24

Economy that incorporates parts of all three economic systems

Mixed economy

25

Focuses on facts and cause-and-effect relationships

Positive economics

26

Incorporates value judgments about what the economy should be like or what particular policy action should be recommended to achieve a desirable goal

Normative economics

27

Examines either the economy as a whole or its basic subdivisions or aggregates such as the government household and business sectors

Macroeconomics

28

Part of economics concerned with individual units such as a person a household a firm or an industry

Micro economics