 | Term | Definition |
| |
Economics |
Study how limited resources are allocated |
| |
Microeconomics |
Studies how individuals (firms or households) make choices and are influenced by economic forces |
| |
Macroeconomics |
Looks at the economy as a whole, focusing on issues such as growth, unemployment, inflation, and business cycles |
| |
Scarcity |
Given limited resources there are opportunity costs for every choice |
| |
Opportunity Cost |
Benefit of an action missed by not choosing the next-best alternative |
| |
Utility |
Allocating and spending resources according to personal preferences |
| |
Market |
Where goods and services are exchanged for mutal benefit |
| |
Types of Resources |
Natural resources, human resources, man-made resources |
| |
Factors of Production |
Land, labor, capital, entrepeneur |
| |
Land |
Includes natural resources , such as minerals, forests, and water |
| |
Labor |
Refers to the physical and mental talents that people contribute to the production process |
| |
Capital |
Consists of produced goods that can be used as inputs for further production; such as machinery, tools, buildings |
| |
Entrepeneur |
Refers to the particular talent that people have for organizing the resources of land, labor, and capital for the production of goods |
| |
Rationing |
Means for deciding who gets what quantities of the available goods and resources |
| |
Competition |
Scarcity implies _________ |
| |
Choice |
Opportunity cost implies ________ |
| |
Theory |
An abstraction representation of the real world designed with the intent to better understand the real world |
