Flashcards in Chapter 1: What is Economics? Deck (20):
the fundamental and universal economic problem.
=the inability to get everything we want
the social science that studies the choices that individuals, businesses, governments and entire societies have to make as they cope with scarcity.
the study of choices that individuals and businesses make, the way these choices interact in markets, and the influence of governments.
the study of the performance of the national economy and the global economy.
goods and services
the objects that people value and produce to satisfy human wants.
factors of production (list 4)
"gifts of nature" ex. land, minerals and water used to produce goods and services.
the work time and work effort people devote to producing goods and services.
the quality of labor depends on _____ _____
tools, instruments, machines, buildings and other constructions that businesses use to produce goods & services.
money, stocks, bonds
the human resources that organizes land, labor, and capital.
what do they earn?
an exchange- giving up one thing to get something else.
people make rational choices= they compare the costs and benefits and then make the choice that achieves the greatest benefit over cost.
opportunity cost (of something)
is the highest-valued alternative that must be given up to get it.
not all the alternatives foregone, it is ONLY the highest-valued.
all tradeoff involves an opportunity cost.
the benefit that arises from an increase in an activity
the opportunity cost of an increase in an activity
choices that compare the marginal benefit of a small change to the marginal cost of the small change are said to be made at the ___