intro Flashcards
(25 cards)
something we desire but that is not necessary for survival
want
something essential for survival
need
physical objects that someone produces
goods
actions or activities that one person performs for another
services
the fact that limited amounts of goods & services are available to meet unlimited wants
scarcity
the study of how people seek to satisfy their needs & wants by making choices
economics
occurs when consumers want more of a good or service than producers are willing to make available
shortage
people who decide how to combine resources to create new goods & services
entrepreneur
resources used to make all goods & services
factors of production
all natural resources used to produce goods & services
land
the effort people devote to tasks for which they are paid
labor
any human-made resource that is used to produce other goods & services
capital
human-made objects used to create other goods & services
physical capital
the knowledge + skills a worker gains through education & experience
human capital
the act of giving up one benefit in order to gain another greater benefit
trade-off
one of the most common choices facing governments
the choice between spending money on military or domestic needs
“guns or butter”
the most desirable alternative somebody gives up as the result of a decision
opportunity cost
when you decide how much more or less to do
thinking at the margin
decision makers have to compare the opportunity costs & the benefits
what will they sacrifice & what will they gain?
cost/benefit analysis
the extra cost of adding 1 unit
marginal cost
the extra benefit of adding the same unit
marginal benefit
a graph that shows alternative ways to use the economy’s productive resources
production possibilities curve
the use of resources in such a way to maximize the output of good & services
efficiency
the use of fewer resources than the economy is capable of using
underutilization
