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PCS Economics
Economics Vocabulary Chapter 2
| Term | Definition |
|---|---|
| good | a physical article that has been produced for sale or use |
| service | work done by someone else for which a consumer, business or government is willing to pay |
| shortage | a lack of something that is desired |
| input | a resource used in the production process; also know as a factor of production |
| factors of production | the resources used to produce goods and services. Economists define these resources as land, labor, and capital |
| output | the goods or services generated by the production process |
| production equation | a formula used to represent the production process: land + labor + capital = goods and services |
| entrepreneurship | the willingness and ability to take the risks involved in starting and managing a business |
| entrepreneur | assemble all the other inputs to create new goods and services |
| land | all the natural resources, including energy, that are used to produce goods and services; one of the factors of production |
| perpetual resourse | a natural resource that is widely available and in no danger of being used up (ex. sunlight and wind) |
| renewable resource | a natural resource that, with careful planning, can be replaced as it is used (ex. forests, freshwater, food) |
| nonrenewable resource | a natural resource that cannot be replaced once it is used (ex. oil and coal) |
| labor | the time and effort people devote to producing goods and services in exchange for wages; one of the factors of production |
| capital | the tools, machines, and buildings used to produce goods and services |
| human capital | the knowledge and skills people gain from education, on-the-job training, and other experiences |
| correlation | a relationship |
| financial capital | money used for investment or production |
| physical capital | the man made objects - tools, machinery, buildings, and other goods - used in production; also called capital goods |
| capital goods | concrete productive resources |
| productivity | measure of the output of any economy per unit of input |
| utility | the pleasure, satisfaction or benefit a person receives form consuming a product or service or from taking an action |
| opportunity cost | the value of the next best alternative that is given up when making a choice, a measure of what you must give up to get what you want |
| marginal utility | the extra satisfaction or pleasure achieved from an increase of one additional unit of goods or services |
| negative utility | a lack of pleasure or satisfaction from consuming a product or service or taking an action. (the opposite of utility) |
| law of diminishing marginal utility | the general observation that as the quantity of a good or service consumed increases, the benefits for the consumer of each additional unit decreases |
| production possibilities frontier | a simple model of an economy that shows all the combinations of two goods that can be produced with the resources and technology currently available |
| production possibilities curve | a graph showing the combination of two goods that can be produced with a given set of resources |
| economic efficiency | the result of using resources in a way that produces the maximum amount of goods and services |
Created by:
Ms.Sala
Popular Economics sets