Chapter 1- Section 1 Flashcards
The study of how people try to satisfy what appears to be seemingly unlimited and comparing wants through the careful use of relatively scarce resources
Economics
Fundamental economic problem facing all societies; condition that results from society not having enough resources to produce all the things people would like to have
Scarcity
A basic requirement for survival and includes food, clothing, and shelter
Need
A way of expressing a need ex: food- may decide to have pizza instead of chicken
Want
The term want is broader than the term need. True or false?
True
There is No such thing as a free lunch. Why?
People still have to be paid for what they produce. Someone always have to pay
What are the three basic questions?
WHAT to produce, HOW to produce, and FOR WHOM to produce
A society cannot have everything it’s people want
WHAT to produce
Mass production method (lots of machinery and few workers) or less equipment and more workers
HOW to produce
Not enough made for everyone
FOR WHOM to produce
Resources required to produce the things we would like to have, are land, capital, labor, and entrepreneurs
Factors of production
Refers to the “gifts of nature” or natural resources not created by humans
Land
The tools, equipment, machinery, an factories used in the production of goods and services
Capital
The money used to buy the tools and equipment in production
Financial capital
People with all their efforts, abilities, and skills
Labor
Risk-taker in search of profits who does something new with existing resources
Entrepreneurs
Entrepreneurs are thought of as being the ________ in an economy because they exhibit the ability to start new businesses or bring new products to the market
Driving force
Process of creating goods and services; when land, capital, labor, and entrepreneurs are all present
Production
Economics is a what because it deals with the behavior of people as they deal with the basic issue?
Social science
What are for elements to the study of economics?
Description, analysis, explanation, and prediction
The dollar value of all final goods and services, and structures produced within a country’s borders in a 12-month period
Gross Domestic Product (GDP)
Description is important why?
We need to know what the world around us looks like
Analysis is important why?
To discover why things work and how things happen
Explanation is important why?
If we understand how the economy works, some economic problems will be much easier to address or even fix in the future
