economics chapters 1 vocabulary
Terms in this set (34)
the condition that results 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.
A way of expressing a need
Factors of production
resources required to produce the things we would like to have: land, capital, labor, and entrepreneurs.
'gifts of nature' not created by human effort
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.
people with all their efforts, abilities, and skills.
a risk-taker in search of profits who does something new with existing resources.
or the process of creating goods and services and take place.
Gross Domestic Product (GDP)
the dollar value of all final and services, and structures produced within a country's borders in a measure of a country's total output and is a key measure of the nation's economic health.
goods and services that are useful, relatively scarce, and transferable to others.
an item that is economically useful or satisfies an economic want, such a a book, car, or cd player.
is intended for final use by individuals.
capital goods: when manufactured goods are used to produce other goods and services.
work that is performed for someone.
refers to 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.
the accumulation of those products that are tangible, scare, 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 total output of goods and services increases over time.
a measure of the 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 effectively than others.
the sum of skills, abilities, health, and motivation of people.
the cost of the next best alternative use of money, time, or resources when on choice is made rather than another
production possibilities frontier (ppf)
a diagram representing various combinations of goods that/or services an economy can produce when all productive resources are 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 private owned businesses, rather than the government, make the majority of the WHAT, HOW, and, FOR WHOM decisions
standard of living
the quality of life based on the possession of the necessities and luxuries that make life easier
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