Chapter 1: What is Economics? Flashcards

(32 cards)

1
Q

need

A

something necessary for survival; i.e. air, food, shelter, etc.

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2
Q

want

A

an item we desire but that is not essential to survival

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3
Q

economics

A

the study of how people seek to satisfy their needs and wants by making choices

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4
Q

scarcity

A

limited quantities of resources to meet unlimited wants

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5
Q

goods

A

physical objects such as clothes or shoes

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6
Q

services

A

actions or activities that one person preforms for another

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7
Q

shortage

A

a situation in which a good or service is unavailable

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8
Q

land

A

all natural resources used to make goods & services

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9
Q

labor

A

effort that people devote to a task for which they are paid

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10
Q

capital

A

any human-made resource that is used to create other goods and services; two kinds: physical and human

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11
Q

physical capital

A

all human-made goods that are used to produce other goods and services; tools and buildings

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12
Q

human capital

A

the skills and knowledge gained by a worker through education and experience

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13
Q

entrepreneur

A

ambition leader who combines land, labor, and capital to create and market new goods and services

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14
Q

trade-off

A

an alternative that we sacrifice when we make a decision

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15
Q

guns or butter

A

a phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods

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16
Q

opportunity cost

A

the most desirable alternative given up as the result of a decision

17
Q

thinking at the margin

A

deciding whether to do or use one additional unit of some resource

18
Q

production possibilities curve

A

a graph that shows alternative ways to use an economy’s resources

19
Q

production possibilities frontier

A

the line on a production possibilities graph that shows the maximum possible output

20
Q

efficiency

A

using resources in such a way as to maximize the production of goods and services

21
Q

underutilization

A

using fewer resources than an economy is capable of using

22
Q

cost

A

to an economist, the alternative that is given up because of a decision

23
Q

law of increasing costs

A

law that states that as we shift factors of production from making one good or service to another, the cost of producing the second item increases

24
Q

economics

A

What begins with the idea that not everyone can have what they need and want?

25
scarcity
Economics is about solving the problem of...
26
because our needs and wants are greater than our resource supply
Why will scarcity always exist?
27
factors of production
land, labor, and capital; the three groups of resources that are used to make all goods and services
28
land, labor, and capital
What are the three factors of production?
29
because land, labor, and capital are scarce
Why are goods and services scarce?
30
its technological level and the resources it has available
A country's production possibilities depend on what two things?
31
a graph
What shows alternative ways to use an economy's resources?
32
efficiency, growth, cost
A production possibilities graph can show what three things?