Flashcards in Chapter 1 Deck (24):
lack of resources available to meet all human wants
desires that can be met by consuming products; unlimited and ever changing
things necessary for survival
physical objects that can be bought
work one person does for another pay
person who buys a good or service for personal use
person who makes a good or provides a service
what will be produced?
societies must decide on a mix of goods to produce, depends on their natural resources; some countries allow producers and consumers to decide, in other countries the government decides
how will it be produced?
decisions on production methods involve using resources efficiently; unskilled labor force: might use labor intensive methods, skilled labor force: might use capital intensive methods
for whom will it be produced?
how they are distributed involves two questions: how should each person's share be determined? how will goods and serviced be delivered to people?
factors of production
land, labor, capital, entrepreneurship
benefits that encourage people to act in certain ways
benefit or satisfaction gained from using a good or service
the value of the next best alternative a person gives up, not the value of all possible alternatives
examining cost, expected benefits of choices
additional cost of using one more unit of good or service
additional benefit of using one more unit of good and service
producing the maximum amount of goods and services possible
producing fewer goods and services than possible
studies behavior of individual players in an economy (individuals, families businesses)
studies behavior of economy as a whole (inflation, unemployment, aggregate demand and aggregate supply)
describes and explains economic behavior as it is
studies what economic behavior should be