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Economics Chapter 1 vocab
Terms in this set (37)
The conditions that result from society not having enough resources to produce all the things people would like to have.
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.
A basic requirement for survival and includes food, clothing, and shelter. (6)
A way of expressing a need. (6)
It means "There is no such thing as a free lunch"
Factors of Production
Resources required to produce the things we would like to have, are land, capital, labor, and entrepre- neurs.
Refers to the "gifts of nature," or natural resources not created by humans. "Land" includes deserts, fertile fields, forests, mineral deposits, livestock, sunshine, and the climate necessary to grow crops.
The tools, equipment, machinery, and factories used in the production of goods and services.
The money used to buy the tools and equipment used in production.
The third factor of production in which people with all their efforts, abilities, and skills.
A risk-taker in search of profits who does something new with existing resources.
The process of creating goods and services.
Gross Domestic Product (GDP)
The dollar value of all final goods and services, and structures produced within a country's borders in a 12-month period.
Scarce goods and services that are useful, relatively scarce, and transferable to others.
An item that is economically useful or satisfies an economic want, such as a book, car, or com- pact disc player.
An economic product that is intended for final use by individuals.
When manufactured goods are used to produce other goods and services.
Work that is performed for someone.
a worth that can be expressed in dollars and cents.
paradox of value
The situation where some necessities, such as water, have little monetary value, whereas some non-necessities, such as diamonds, have a much higher value
The capacity to be useful and provide satisfaction. It is something that is fixed or measurable.
The accumulation of those products that are tangible, scarce, useful, and transferable from one person to another.
A location or other mechanism that allows buyers and sellers to exchange a certain economic product.
The markets where productive resources are bought and sold.
Markets where producers sell their goods and services to consumers.
Occurs when a nation's ,j total output of goods and services increases over time.
A 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.
Takes place when factors of production perform tasks that they can do relatively more efficiently than others.
The sum of the skills, abilities, health, and motivation of people.
We rely on others, and others rely on us, to provide the goods and services that we consume.
Alternative choices, whenever people make an economic decision.
The cost of the next best alternative use of money, time, or resources when one choice is made rather than another.
production possibilities frontier
A diagram representing various combinations of goods and/or services an economy can produce when all pro- ductive resources are fully employed.
A way of thinking about a problem that compares the costs of an action to the benefits received.
free enterprise economy
One in which consumers and privately owned businesses, rather than the government, make the majority ofthe WHAT, HOW, and FOR WHOM decisions.
standard of living
The quality of life based on the possession ofthe necessities and luxuries that make life easier.
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