MacroEco Chap 1 pt2 Word Scramble
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| Question | Answer |
| Entrepreneur | a)Person operating a business b) Decides what goods and services to produce and how to produce them c) Puts own funds at risk; if wrong decision can lose money. d)50% new business fail in 4 yrs, but without entrepreneurs no economic progress |
| Invention | Development of a NEW good or NEW process for makeing a good |
| Innovation | Practical application of an invention (widespread use); includes any significant improvement in a good or in the means of producing a good. Time passes between appearance of an idea and it development for wide spread use (innovation). |
| Example of Invention versis Innovation | Invention: Wright brother's self-propelled plane (1906) Innovation: DC-3 Douglas airplane (1936)used for intercity flights |
| Technology | Processes a firm uses to produce good and services |
| Firm, company, or business | Organization that produces a good or service. Most firms produce for profit but some are nonprofit (not making money) and ex. is universities and hospitals |
| Goods | Tangible merchandise such as books and computers |
| Services | Activities done for others like providing haircuts or giving investment advice. |
| Revenue | Total amount of money received for selling a good or service. Calculate it by multiplying price per unit by no. of units sold. |
| Profit | Profit = Revenue - Costs |
| Accounting profit | Excludes those costs that firm does not pay for explicitly. (Excludes opportunity cost) |
| Economic profit | Includes all costs (including opportunity cost). In book "profit" means economic profit! |
| Household | All persons occupying a home. Households supplies labor and they demand goods and services. |
| Factors of productions or economic resources | Used by firms to produce goods and services. Main factors are labor, capital, natural resources, land, entrepreneurial ability. |
| Capital | Refers to financial capital or to physical capital. Financial capital - stocks and bonds issued by firms, bank accounts, holdings of money Economics use physical capital- manufactured goods used to produce other goods and services. |
| Examples of physical capital | computers, factory building, machine tools, warehouses, and trucks etc. |
| Capital Stock | Total amount of physical capital available in a country. |
| Human Capital | Accumulated training and skills that workers possess. |
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