the condition that results from society not having enough resources to produce all the things people would like to have (at the same time)
the study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources.
deals with the impact of choices on the TOTAL level of economic activity, government function
focuses on choices made by individual consumers and firms
a basic requirement for survival and includes food, clothing, and shelter
a way of expressing a need
need: food, want: pizza
free lunch concept
in life some things seem to be free, tinstaafl!
(there is no such things as a free lunch!!!!)
who pays for a free school lunch
who pays for a free business lunch
what, how, for whom to produce
three basic questions on how resources are to be used, all based upon a.) local resources and b.) on the situation of the society.
free enterprise, privately-owned
in the American _____ ______ economy, _____ - ______ businesses and consumers, rather than govt answer these three questions.
land, labor, capital, entrepreneurs
4 factors of production
gifts of nature, natural resources not created by humans
people with all their efforts, abilities, and skills
tools, equipment, machinery, and factories used in production of goods and services
business men, risk-takers in search of profits who does something new with existing resources
money used to buy the tools and equipment used in production
process of creating goods and services
description, analysis, explanation, prediction
scope of economics
goods and services that are useful, relatively scarce, and transferable to others
tangible item that is economically useful or satisfies an economic want
intended for final use by individuals
when manufactured goods are used to produce other goods and services
something that lasts, 3+ years
lasts for less than 3 years used on a regular basis
work that is performed for someone, ex: haircut
person who uses goods and services to satisfy wants or needs
process of using up goods and services in order to satisfy wants and needs.
use of goods and services solely to impress others
refers to a worth that can be expressed in dollars and or cents.
paradox of value
situation where some necessities, such as water, have little monetary value, some non-necessities (diamonds and gold) have a much higher value.
the capacity to be useful and to provide satisfaction
accumulation of those products that are tangible, scarce, useful, and transferable from one person to another
any arrangement that allows buyers and sellers to exchange a certain economic product
a nations total output of goods and services increases over time
measure of the amount of output produced by a given amount of inputs in a specific period of time
division of labor
takes place when work is arranged so that individual workers do fewer tasks than before
when factors of production perform tasks that can be done relatively more efficient than others
father of economic thought
wealth of nations
bible of economy
private enterprise should be free from all government interferences
competition and the free marketplace would guide resources to their most productive uses
wealth consisted solely of money was incorrect. source of wealth consisted of all of the goods and services that were product by labor and then consumed by all.
the cost of the next best alternative use of money, time, or other resources. when one choice is made rather than another.
production possibilities graph
popular model economist use to illustrated the concept of opportunity cost
opportunity costs is expressed in terms of...
a way of thinking abour a problem that compares the costs of an action to the benefits received