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Economics Terms 1
Question | Answer |
---|---|
Need | something that is necessary for survival |
Want | something of desire that is not needed for survival |
Economics | the study of how people seek to satisfy their needs and wants by making choices |
goods | physical objects |
services | actions or activities performed for another |
scarcity | limited resources for unlimited wants |
shortage | when a good or service is unavailable |
factors of production | land, labor, and capital |
land | natural resources used to make goods and services |
labor | effort that people devote to a task for which they are paid |
capital | any human made resource used to create other goods and services |
physical capital | all human made goods used to produce other goods and services |
human capital | skills knowledge gained by a worker through education and experience |
entrepreneur | a leader who combines land, labor, and capital to create and market goods and services |
trade-offs | an alternative that we sacrifice when we make a decision |
guns vs. butter | a phrase referring to trade-offs that nations face when choosing whether to produce more or less military or consumer goods |
opportunity cost | the most desirable alternative given up as the result of a decision |
thinking at the margin | deciding whether to do or use one additional unit of some resource |
production possibilities curve | a graph that shows alternative ways to use an economy's resources |
production possibilities frontier | the line on a porduction possibilities graph that shows the maximum possible output |
efficiency | using resources in such a way as to maximize the production of goods and services |
underutilization | using fewer resources than an economy is capable of using |
cost | to an economists, the alternative that is given up because of a decision |