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C&E Unit 7 Study Guide: Economics

Terms in this set (57)

A tangible object that can be bought and used to meet the needs and wants of consumers.
good
Our goods and services are limited due to this economic problem.
scarcity
Man-made objects that are used to make other goods and services.
physical capital
A resource that can be naturally replenished.
renewable resources
A fixed income paid on a monthly basis.
salary
An alternative that we sacrifice when we make a decision.
trade off
the most desirable sacrifice when we make a decision
opportunity cost
That which is necessary for survival.
need
Natural resources used to make goods and services.
land
The person who combines land, labor, and capital to make goods and services.
entrepeneur
A person who works on an assembly line describes this factor of production.
labor
Deciding whether to use one additional unit of some good.
thinking at the margin
The degree to which resources are being used efficiently.
productivity
A point of underutilization would be plotted to the _______ of the production possibilities frontier.
left
Knowledge and skill gained on the job that is used to make goods and services.
human capital
If an economy grows, the production possibilities frontier will shift to the _________.
right
A reward that is offered to persuade people to take certain economic actions.
incentive
A person who buys or uses goods and services.
consumer
A line that shows the ways an economy can maximize its output
production possibilities frontier
Using fewer resources than an economy is capable of using
underutilization
In the example of "guns or butter," the trade-off for producing more butter is _______.
guns
In the example of "guns or butter," the trade-off for producing more guns is _______.
butter
A cost that remains the same no matter how many goods are produced.
fixed cost
The payment for the service of one unit of labor.
wage
Fixed costs plus variable costs.
total cost
A person who makes goods and services.
producer
The extra cost of producing one more unit of a good.
marginal cost
The expenses that change with the number of goods produced.
variable cost
When using the cost benefit analysis, you want your benefits to be ______ than your costs.
greater
Actions one person performs for another.
service
What are the 3 Basic Economic Questions??? (Remember why we even have to answer these 3 questions/ the goal of economics!!!!)
What to produce? How to produce it? For Whom to produce?
What are the 5 basic characteristics of a market economy?
1. Individual Freedom
2. Competitions
3. Dealing with Externalities
4. Higher per capita GDP
5. Private citizens
improving a good or service
innovation
goods or raw materials used to make finished products
capital goods
the amount of money left over after all the costs of production have been paid
profit
an economic system in which private citizens own and use the factors of production in order to seek a profit
capitalism
machines control production
automation
the breaking down of a job into separate, smaller tasks, which are performed by different workers
division of labor
goods bought in the market and not used in the production of other goods
consumer goods
competition is allowed to flourish with a minimum of government interference
free market economy
new goods and services
inventions
father of economics and author of The Wealth of Nations
Adam Smith
takes place when people, businesses, regions, and even countries concentrate on goods and services that they can produce better than anyone else
specialization
a level of production in which the marginal product of labor decreases as the number of workers increases
law of diminishing marginal returns
machines perform physical tasks
robotics
working class employee who performs manual or unskilled labor
blue collar worker
guides the nation's resources to their most productive use and helps the market to self-regulate itself
invisible hand
a manufacturing process in which interchangeable parts are added to a product to create an end product
assembly line
places where the prices of goods and services are determined as exchange takes place
market
perform tasks that require less physical labor/skilled workers
white collar worker
perform tasks that require less physical labor/skilled workers
Laissez-faire economics
the idea that the consumer is the king or ruler of an economy and determines what products will be produced
consumer sovereignty
the struggle between buyers and sellers to get the best products at the lowest prices, keeps cost of production low and quality high
competition
in a free market economy, these own the factors of production and are the consumers of goods and services
households
an organization that uses resources to produce a product which it sells, changes factors of production into products
firms
firms purchase the factors of production from households in the _______ market
factor market
goods and services produced by firms are purchased by households in the ________ market.
product market
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