click below
click below
Normal Size Small Size show me how
Economics
Economics Chapter One
Question | Answer |
---|---|
need | something essential for survival |
want | something that people desire but that is not necessary for survival |
goods | the physical objects that someone produces |
services | the actions or activities that one person performs for another |
scarcity | whenever people are willing to pay any amount for something;the principle that limited amounts of goods and services are available to meet unlimited wants |
economics | the study of how people seek to satisfy their needs and wants by making choices |
shortage | a situation in which consumers want more of a good or service than producers are willing to make available at a particular price |
entrepreneur | a person who decides how to combine resources to create goods and services |
factors of production | the resources that are used to make goods and services |
land | all natural resources used to produce goods and services |
labor | the effort people devote to tasks for which they are paid |
capital | any human-made resource that is used to produce other goods and services |
physical capital | machines,buildings,made to build something else: the human-made objects used to create other goods and services |
"guns or butter" | a phrase expressing the idea that a country that decides to produce more military goods ("guns") has fewer resources to produce consumer goods ("butter") and vice versa |
opportunity cost | the most desirable alternative given up as the result of a decision:Best of your trade-offs, the best thing you gave up |
thinking at the margin | the process of deciding whether to do or use one additional unit of some resource |
cost/benefit analysis | a decision-making process in which you compare what you will sacrifice and gain by specific action |
marginal cost | the extra cost of adding one unit:how much cost to make one more |
marginal benefit | the extra benefit of adding one unit: what benefit of making one more |
production possibilities curve | a graph that shows alternative ways to use an economy's productive resources: the most possible amount that can be produces using the resources as efficient as possible |
efficiency | the use of resources in such a way as to maximize the output of goods and services |
underutilization | the use of fewer resources that an economy is capable of using |
trade-offs | giving up something for something else |
law of increasing cost | when you produce something in a bad environment/not using resources then the cost will go up to make it and then you need to improve it |