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23 Cards in this Set
- Front
- Back
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Economics
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The study of the choices that people make to satisfy their wants and needs.
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Economic Problem
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Every individual or nation has unlimited wants and needs. However, the resources available to fulfill those wants or needs are limited.
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Scarcity
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Something is scarce if more of it cannot be obtained without sacrificing something of value. Scarcity is used to describe a permanent condition for humanity.
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Opportunity Cost
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The value of what must be sacrificed to obtain more of that good.
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Shortage
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Similar to scarcity but describes a temporary condition.
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Factors of Production
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The factors of production, or resources, include land, labor, physical capital, human capital, and entrepreneurship.
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Production-Possibilities Curve (PPC)
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A diagram which shows the maximum production of goods and/or services which an economy can attain if all productive resources are fully employed.
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Circular Flow Model
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Demonstrates the interaction and interdependence of the household and business sectors of the economy.
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Sectors of an Economy
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Include households, firms, goods markets, resources markets, and the government.
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Product Markets
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Where goods and services are exchanged for payments from businesses to consumers.
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Factor Markets
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Resources are exchanged from households to business firms in return for payments such as wages and interest on capital investments.
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How does technological innovation promote economic growth?
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Technological innovation promotes economic growth by encouraging efficiency, lowering production costs, and results in a larger variety of goods etc.
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Developed Countries
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Countries with high levels of urbanization and industrialization that enjoy high material standards of living.
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Less Developed Countries
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Countries with lower levels of progress and prosperity.
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Developing Countries
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Countries showing evidence of economic, social, and political progress.
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Goods
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Object or material that can be purchased to satisfy human wants or needs.
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Services
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Any action or activity that is performed for a fee.
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Consumer
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One who buys goods or services for personal use rather than for resale or use in production or manufacturing.
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Producer
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A person, group, or business that makes goods or provides services to satisfy consumers' wants and needs.
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Microeconomics
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The study of a single factor of an economy - such as individuals, households, businesses, and industries - rather than an economy as a whole.
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Macroeconomics
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The study of an entire economy or one of its principle sectors.
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Self-Sufficiency
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The ability to fulfill all of one's needs without assistance.
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Specialization
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The focus of a worker or nation on only one or a few aspects of production in order to improve efficiency.
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