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Macro Econ Chaminade
Terms Pearson Chapter 2
| Term | Definition |
|---|---|
| scarcity | A situation in which the ingredients for producing the things that people desire are insufficient to satisfy all wants at a zero price |
| Production | Any activity that results in the conversion of resources into products that can be used in consumption. |
| Land | The natural resources that are available from nature |
| Labor | Productive contributions of humans who work |
| Physical capital | All manufactured resources, including buildings, equipment, machines, and improvements to land that are used for production |
| Human Capital | The accumulated training and education of workers |
| Entrepreneurship | The component of human resources that performs the functions of raising capital |
| Goods | All things from which individuals derive satisfaction or happiness |
| Economic goods | Goods that are scarce, for which the quantity demanded exceeds the quantity supplied at a zero price |
| Services | Mental or physical labor or help purchased by consumers. |
| Opportunity costs | The highest-valued next-best alternative that must be sacrificed to obtain something or to satisfy a want. |
| Production Possibilities Curve (PPC) | A curve representing all possible combinations of maximum outputs that could be produced assuming a fixed amount of productive resources of a given quality |
| Technology | Society's pool of applied knowledge concerning how goods and services can be produced |
| Efficiency | The case in which a given level of inputs is used to produce the maximum output possible. |
| Inefficient point | Any point below the production possibilities curve. Unemployment |
| Law of Increasing additional cost | The fact that the opportunity cost of additional units of a good generally increases as society attempts to produce more of that good. |
| Consumption | The use of goods and services for personal satisfaction |
| Specialization | The organization of economic activity so that what each person (or region) consumes is not identical to what that person (or region) produces. |
| Comparative advantage | The ability to produce a good or service at a lower opportunity cost to other producers. |
| Absolute Advantage | The ability to produce more units of a good or service using a given quantity of labor or resource inputs |
| Division of Labor | The segregation of resources into different specific tasks. Ex. assembly line |
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