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26 Cards in this Set
- Front
- Back
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scarcity
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situation in which the ingredients for producing the things that people desire are insufficient to satisfy all wants.
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resources
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inputs used in the production
of things that people want. |
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production
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any activity that results in the conversion of resources into products that can be used in consumption.
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land
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called the natural resource, and consists of all the gifts of nature.
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labor
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productive contributions made by individuals who work
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capital goods
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all manufactured resources that are used for production
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human capital
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accumulated training and education workers receive that increases their productivity.
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entrepreneurship
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associated with risk and introducing new methods and ideas that could lead to more money income.
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goods
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all things from which individuals derive satisfaction or happiness.
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economic goods
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goods that are scarce.
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services
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mental or physical labor or help purchased by consumers
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needs
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an absolute necessity to stay alive.
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wants
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what people would buy if their income was unlimited.
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scarcity
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a situation that requires choices be made.
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forgone alternatives
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alternatives that were considered but not chosen
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opportunity cost
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the highest valued, next-best alternative that must be sacrificed for the choice that was made.
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trade-offs
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any activity using any resource you are trading off the use of that resource for one or more alternative uses.
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Production Possibilities Curve (PPC)
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shows that some of one good must be given up to have more of another.
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efficiency
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a given level of inputs is used to produce the maximum output possible.
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law of increasing relative cost
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opportunity cost of additional units of a good increases as society attempts to produce more of that good
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capital goods
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goods for manufacturers
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forgoing current consumption
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when resources are used to produce capital goods, we are forgoing current consumption.
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specialization
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working at a relatively well-defined, limited activity.
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comparative advantage of specialization
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goods or services produced at a lower opportunity cost compared to other producers
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absolute advantage
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producing more units of a good or service using a given quantity of labor or resource
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division of labor
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segregation of a resource into different specific tasks. assembly line
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