How can we help?

You can also find more resources in our Help Center.

27 terms

Econ Unit 1

STUDY
PLAY
Economics
The study of how people seek to satisfy their needs and wants by making choices
Microeconomics
Study of individual consumers and businesses making economic choices
Macroeconomics
the study of the behavior and decision making of entire economic systems
Good
A tangible product that can be produced and consumed
Resource
A substance in the environment that is useful to people, is economically and technologically feasible to access, and is socially acceptable to use.
Service
Any activity that fulfills a human want or need and returns money to those who provide it.
Tangible
can be touched
Intangible
not able to be perceived by touch
Want
Something not required for survival but is desired by consumers
Need
Basic requirement for survival: food, water, shelter
Scarcity
Limited quantities of resources to meet unlimited wants
Three Main Economic Questions
What to produce; how to produce it; for whom are you producing
Economic System
A system a country has in place that answers the three economic questions: what to produce, how to produce it, for whom are you producing
Trade-Off
The giving up of one benefit or advantage in order to gain another regarded as more favorable.
Opportunity Cost
Cost of the next best alternative use of money, time, or resources when one choice is made rather than another
Incentive
Something that encourages greater action or effort, such as a reward
Fixed Cost
A cost that does not change, no matter how much of a good is produced
Variable Cost
a cost that rises or falls depending on how much is produced
Marginal Cost
Extra cost of producing one additional unit of production.
Marginal Benefit
the extra benefit of adding one unit
Cost-Benefit Analysis
Economic model that compares the marginal costs and marginal benefits of a decision
Factors of Production
Land, labor, capital and entrepreneurs; the four groups of resources that are used to make all goods and services
Natural Resources
Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain
Labor
Human effort directed toward producing goods and services
Capital
The manufactured goods used to make a product
Entrepreneur
A person who has an idea, starts up and takes on the risk of a business
Comparative Advantage
The ability of a country to produce a good at a lower cost than another country can.