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21 Cards in this Set
- Front
- Back
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scarcity
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infinite human desires/wants clashes with limited resources
what, how + for who to produce? |
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economics
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study of how individuals and societies satisfy their unlimited wants and limited money
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factors of production
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resources needed to produce goods + services
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land (factors of production)
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refers to all natural resources used to produce goods + services
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labor (factors of production)
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all of the human efforts used to produce goods + services
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capital (factors of production)
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all of the resources made + used by people to produce goods + services
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incentives
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methods used to encourage people to take certain actions
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utility
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benefit or satisfaction received from doing a good or service
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economize
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make decisions according to the best combination of costs + benefits
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trade-off
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alternative people give up when they make choices
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opportunity cost
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value of something that is given up to get something else that is wanted
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marginal cost
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additional cost of using one more unit of a product
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marginal benefit
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additional satisfaction from using one more unit of a product
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economic model
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simplified representations of economic forces to clarify trade-offs
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production possibilities curve
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graph used to show the impact of scarcity on an economy
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underutilization
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producing fewer goods and services than possible
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law of increasing opportunity costs
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as production switches from one product to another, increasing amounts of resources are needed to increase the production
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microeconomics
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study of the behavior of individual players in an economy such as individuals, families and businesses
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macroeconomics
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study of the behavior of the economy as a whole and involves topics such as inflation, unemployment, aggregate demand/supply
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positive economics
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describes economic behavior as it is
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normatic economics
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judgement of what economic behavior ought to e
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