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chpt 2
An Economic Way of Thinking
| Term | Definition |
|---|---|
| Economics | Choices that people make to satisfy their needs and wants. |
| Economist | A person who studies these choices |
| Microeconomics | Choices made by economic actors, such as household, companies, and individual markets. |
| Macroeconomics | Examines the behavior of the entire economies |
| Consumers | People who decide to buy things |
| Producers | People who make the things that satisfy consumers needs and wants. |
| Goods | Physical object that can be purchased |
| Services | Actions or activities that are performed for fee, like lawyers. |
| Resource | Anything people use to make or obtain what they need or want. |
| Factors of Production | Resources that can be used to produce goods and services. |
| Natural Resources | Items provided by nature that can be used to produce goods into providing services |
| Human Resource | any human effort excerted during production |
| Capital Resources | The manufactured materials used to create products |
| Capital Goods | The buildings, structures, and michinery and tools used in the production process |
| Consumer Goods | the goods and services that people buy |
| Technology | The use of techical knowledge and methods to create new products or exsisting products more efficently |
| Entrepreneurship | The combination of orginizational abilities and risks taking involved in starting a new business or introducing a new product |
| Entreprenuer | A person who attempts to start a new business or introduce a new product risking economic failure in reaturn for the possibility of financial gain |
| Efficency | which is the use of the smallest amount of resources to produce the graetes amount of output |
| Division of labor | asending a small number tasks to each worker |
| Specialization | Allows each employee to work faster into produce a greater number of alarm clocks |
| Exchange | producers and consumers agree to provide one type of items in return for another |
| Barter | People exchange one set of goods for another |
| Money | An item that is readily excepted by people in return for goods and services |
| Credit | Allows consumers to use items before completing payement for the merchandise |
| Value | An expression of the amount of money or price |
| Utility | Usefulnesss to a person |
| Self-sufficency | People that can fulfill all their needs without outside assistance |
| Interdependence | Events or developements in one region of the world or sector of the economy influence events or devolepements in other regions or sectors |
| Scarcity | forces people to make decisions about how to use resources effectively |
| Productivity | The level of output that results from a given level of input |
| Trade-off | One good is sacrificed for another |
| Oppurtunity Costs | The value of the next best alternative that is given up to obtain the perferred item |
| Production Possibilities Curve | Shos all of the possible combinations of two goods or services that can be produced within a stated time period givin to important assumptions |
| Allocate | or distribute resources in order to satisfy the greatesr number of needs and wants |
Created by:
_rios29
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