there is no such thing as a free lunch
TINSTAFL
what is the fundamental economic problem?
scarcity
What are the 3 basic questions on how limited resources be used?
WHAT to produce?
HOW to produce it?
WHO to produce it to?
what are the factors of production?
land, capital, labor, entrepreneurs, [production
capital
the tools, equipment, machinary, and focatories used in the production of goods and services.
labor
people with all their efforts, abilities, and skills
the scope of economics the 4 main key elements to its study?
description (GDP), analysis, explanation, prediction
goods, services and consumers
.
consumer goods
is intended by final use by individuals
capital goods
when manufactured goods are used to produce other goods and services
value, utility, and wealth
.
paradox of value
the situation were some necessities, such as water, have little monetary value, whereas some non-necessities, such as diamonds, have a much higher value
utility
the capacity to be useful and provide satisfaction
wealth
.
factor markets
the markets were productive resources are bought and sold
product markets
where producers sell their goods and services to consumers
the circluar flow of economic activity
factor markets > product markets
productivity and economic growth
productivity
division of labor
it can improve productivity
-takes place when work is arranged so that individual wokers do fewer tasks than before
specailization
improve work of productivity
-takes place when factors of production preform tasks that they can do relatively more efficiently than others
human capital
the sum of skills, abilities, health, and motivation of people
investing in the future
investments in human and physical capital can increase production and promote economic growth
economic interdependence
that we rely on others and others rely on us to provide goods and services that we consume
trade offs
alternate choices when making an economic decision
opportunity costs
the cost of the next best alternative use of money ,time, or resources when one choice is made rather than another
ideitfying possible alternatives, fully employed resources, opportunity costs, the cost of idle resources, economic growth
.
thinking like a economist
build simple models, employ cost benefit analysis, take small,incremental steps
free enterprise system
one in which the consumers and privately owned businesses,rather than the government make the majority of the who, what, how decisions
making rational choic and economics for citizenship and a better standard of living
.