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