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24 Cards in this Set
- Front
- Back
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Need
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Something like air, food, or shelter that is necessary for survival.
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Want |
An item that we desire but that is not essential for survival.
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Economics |
The study of how people seek to satisfy their needs and wants by making choices.
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Goods |
Physical objects such as clothes or shoes.
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Services |
Actions or activities that one person performs for another.
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Scarcity |
Limited quantities of resources to meet unlimited wants.
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Shortage |
A situation in which a good or service is unavailable. |
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Factors of Production |
Land, labor, and capital are the three groups of resources that are used to make all goods and services.
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Land |
Natural resources that are used to make goods and services.
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Labor |
The effort that people devote to a task for which they are paid.
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Capital |
Any human-made resource that is used to create other goods and services.
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Physical Capital |
All human-made goods that are used to produce other goods and services; tools and buildings.
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Human Capital |
The skills and knowledge gained by a worker through education and experience.
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Entrepreneur
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Ambitious leader who combines land, labor, and capital to create and market new goods and services.
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Trade-off |
An alternative that we sacrifice when we make a decision.
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Guns or Butter |
A phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods.
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Opportunity Cost |
The most desirable alternative given up as the result of a decision.
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Thinking at the margin
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Deciding whether to do or use one additional unit of some resource.
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Production Possibilities Curve |
A graph that shows alternative ways to use an economy’s resources.
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Production Possibilities Frontier |
The line on a production possibilities graph that shows the maximum possible output.
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Efficiency |
Using resources in such a way as to maximize the production of goods and services.
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Underutilization
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Using fewer resources than an economy is capable of using.
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Cost
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To an economist, the alternative that is given up because of a decision.
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Law of increasing costs
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Law that states that as we shift factors of production from making one good or service to another, the cost of producing the second item increases.
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