| Term | Definition |
|---|
| Factor of Production | Any resource used in the productive process, which includes land, labor, capital, and entreprenuership. |
| Land | Natural resources - water, air, minerals, trees, forests, etc. |
| Labor | Human effort, physical or mental, used in the productive process. |
| Capital | Man made goods used in the production of other goods or services. |
| Human Capital | The knowledge and skills of labor, acquired primarly by education and training. |
| Entreprenuership | A person who assumes the risks and uncertainties of doing business. |
| Production Possibilities | Various combinations of goods than can be produced in an economy assuming economic efficiency. |
| Economic Efficiency | Maximum production of goods and services with fullest employment of an economies resources. |
| Unemployment | At least one factor of production is unused. |
| Underemployment | Using resources, but not to their greatest potential. |
| Opportunity Cost | The best or most valued alternative sacrificed in order to have something else. What is given up in order to have something else. |
| Specialization | The division of work into specialized activities or tasks, allowing people to be more productive. |
| TANSTAAFL Principle | "There ain't no such thing as a free lunch." - Every choice made involves an opportunity cost. |
| Absolute Advantage | The ability to produce using the fewest resources. |
| Comparative Advantage | The ability to product with the lowest opportunity cost. |
| Innovation | An idea that eventually becomes a new, applied technology. |
| Law of Increasing Costs | The idea that as we shift factors of production from making one good or service to another, the cost of producing the second item increases |
Combine with other sets
Share on Facebook
Share on MySpace