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23 Cards in this Set

  • Front
  • Back
Scarcity
exists when human wants (material and non-material) exceed available resources
Labor
the physical and human effort used in the production of goods and services
Land
the natural resources used in the production of goods and services
Capital
the equipment and structures used to produce goods and services
Human capital
human factors that increase productivity; knowledge and skill people receive from education, experience, etc
Entrepreneurship
the process of combining labor, land, and capital to produce goods and services
Goods
items we value or desire
Tangible goods
items we value or desire
Intangible goods
goods that we cannot reach out and touch, such as friendship and knowledge
Services
intangible items of value provided to consumers, such as education
Economic goods
scarce goods created from scarce resources; goods that are desirable but limited in supple items we value or desire
Opportunity costs
the value of the best forgone alternative that was not chosen
Marginal thinking
focusing on the additional, or marginal choices
Marginal choices
involve the effects of adding or subtracting from the current situation, the incremental changes to a plan of action
Rule of rationale choice
individuals will pursue an activity if the expected marginal benefits are greater than the expected marginal costs
Net benefit
the difference between the expected marginal benefits and the expected marginal costs (EMB - EMC)
Positive incentive
an incentive that either reduces costs or increase benefits, resulting in an increase in an activity or behavior
Negative incentive
an incentive that either increases costs or decreases benefits, resulting in a decrease in activity or behavior
Specializing
concentrating in the production of one, or a few, goods
Comparative advantage
occurs when a person or country can produce a good or service at a lower opportunity cost than others
Efficiency
when an economy gets the most of of its scarce resources
Price controls
government mandated minimum or maximum prices
Market failure
when an economy fails to allocate resources efficiently on its own