Economics 1-3

Front 1

Need

Back 1

something like air,food,or shelter that is necessary for survival

Front 2

Want

Back 2

an item that we desire but that is not essential to survival

Front 3

Economics

Back 3

the study of how people seek to satisfy their needs and wants by making choices

Front 4

Goods

Back 4

physical objects such as clothes and shoes

Front 5

Services

Back 5

actions or activities that one person performs for another

Front 6

Scarcity

Back 6

limited quanities of resources to meet unlimited wants( always exists because our needs&wants are always greater than our resource supply)

Front 7

Shortage

Back 7

a situation in which a good or service is unavailable--can be temporary or long-term

Front 8

Factors of Production

Back 8

land, labor,and capital; 3 groups of resources that are used to make all goods and services

Front 9

Land

Back 9

all natural resources that are used to make goods and services Examples: fertile land, coal, water, forests

Front 10

Labor

Back 10

the effort that people devote to a task for which they are paid Example: medical aid provided by a doctor,repair of the TV, artist's painting,

Front 11

Capital

Back 11

any human-made resource that is used to create other goods and services; 2 categories:
physical capital & human capital--an economy requires both

Front 12

Physical capital

Back 12

all human-made goods that are used to produce other goods and services; tools and buildings Examples: shoe factory, the building and all equipment

Front 13

Human Capital

Back 13

the skills and knowledge gained by a worker through education and experience Example: doctor,assembly line workers

Front 14

Entrepreneur

Back 14

ambitious leaders who combines land, labor, and capital to creat and market new goods and services

Front 15

What is the difference between a good and a service?

Back 15

a good is a physical object eg:shoes service is action one person does for another eg: haircut

Front 16

Trade-Off

Back 16

an alternative that we sacrifice when we make a decision Example: choose to spend more tome at work give up watching a movie or a football game

Front 17

Guns or Butter

Back 17

a phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods

Front 18

Opportunity cost

Back 18

the most desirable alternative given up as the result of a decision Example; buy computer, give up going on a trip

Front 19

Thinking at the margin

Back 19

deciding whether to do or use one additional unit of some resource

Front 20

Production possibilities graph

Back 20

a graph that shows alternative ways to use an economy's resources

Front 21

Production possibilities frontier

Back 21

the line on a production possibilities graph that shows the maximum possible output

Front 22

effciency

Back 22

using resources in such a way as to maximize the production of goods and services

Front 23

Underutilization

Back 23

using fewer resources than an economy is capable of using

Front 24

Cost

Back 24

to an economist, cost is the alternative that is given up because of a decision

Front 25

Law of increasing costs

Back 25

as we shift factors of production from making one good or service to another, the cost of producing the second item increases

Front 26

Standard of Living

Back 26

level of economic prosperity

Front 27

Economic System

Back 27

the method used by a society to produce and distribute goods and services

Front 28

Factor Payments

Back 28

the income people receive for supplying factors of production, such as land, labor, or capital

Front 29

Safety Net

Back 29

government programs that protect people experiencing unfavorable economic conditions

Front 30

Collective

Back 30

large farm leased from the state to groups of peasant farmers

Front 31

Communism

Back 31

a political system characterized by a centrally planned economy with all economic & politicalpower resting in the hands of the central government

Front 32

Laissez faire

Back 32

the doctrine that states that government generally should not intervene in the marketplace

Front 33

Privatize

Back 33

to sell state-run firms to individuals

Front 34

Technology

Back 34

the process used to produce a good or sevice

Front 35

Capital goods

Back 35

Same as physical capital--any human made resource that is used to creat other goods and services

Front 36

Product Market

Back 36

the market in which households purchase the goods and services that a firm produce

Front 37

Self-interest

Back 37

one's own personal gain

Front 38

Growth

Back 38

the increase in value of the goods and services produced by an economy

Front 39

Income

Back 39

earned from one's resources, could be natural resources, capital resources, entrepenurship, or by selling one's labor

Front 40

Demand

Back 40

how much ( quanity ) of a product or service is desired by buyers