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Micro - ch 1A
| Question | Answer |
|---|---|
| economics | Study of society's optimal use of scarce resources in the production, distribution and consumption of goods and services. |
| social science | A study of human society and social relationships - people in society and how they interact with each other. |
| scarcity | The condition that human wants exceed the ability to produce goods and services from our limited resources to satisfy these wants (and needs). |
| efficiency | Resources are being used in the best possible way to avoid waste. This ensures that society gets the most (the maximum output) from its available resources. |
| factors of production | All resources or inputs (land, labor, capital and entrepreneurship) used to produce goods and services. |
| opportunity cost | The value of the next best alternative sacrificed (given up) in order to obtain something else. |
| land | Factor of production which includes all natural resources: land and agricultural land as well as minerals, oil reserves, forests, rivers and lakes. |
| resource allocation | assigning available factors of production to specific uses chosen among many possible alternatives |
| physical capital (capital) | man-made factor of production (tools, machines, equipment, factories, etc.) |
| human capital | The education, training and experience embodied in the labor force of an economy. |
| entrepreneurship (management) | The willingness and ability of certain individuals to organize the other three factors of production to take risks. |
| free good | A good with no opportunity cost. |
| potential output | greatest possible output - on the PPC |
| production possibility frontier (curve) | A diagram that shows the combinations of output the economy can possibly produce given the available factors of production and the available production technology. |
| economic good | A good with an opportunity cost. |
| infrastructure | Refers to the road system, rail system, the harbors, airports and telecommunications that a country has and which facilitate economic activity as they lower production and transaction costs. |
| productivity | The amount of goods and services produced from each unit of labor input |
| actual output | quantity of output actually produced - always inside the PPC |
| natural capital | environmental capital which included everything that is included in land such as air, biodiversity, soil quality, global climate |
| labor | Human efforts (both skilled and unskilled) used in the production of goods and services. |
Created by:
econteacher
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