factor of production used by labor in making products
the study of how people seek to satisfy their needs and wants by making choices
the process of starting, organizing, managing, and assuming the responsibility for a business
Factors of Production
What must be combined to produce goods and serives
Four Basic Economic Questions
What to produce, how to produce, how much to produce, and for whom to produce
Any form of human effort exerted in production
Productive resources that are provided by nature
A basic requirement for survival
A way of expressing or communicating a need
a person who uses goods or services
tangible products that we use to satisfy our wants and needs
The next best option that you didn't get. The one you gave up
someone who manufactures something
money earned for doing work
Intangible things that satisfy human wants and needs
The costs or expenses that are the same no matter how many units of a good are produced
Encourages you to purchase a good or service
Fixed Costs + Variable
Meaning that to achieve one we must sacrifice another.
change generally depends on output
Production method that breaks down a complex job into a series of smaller tasks
the use of machinery in place of human labor
Worker who do jobs that involve manual labor
Skills, training, and knowledge of workers
Invention and technological advances that increase economic activity
process of making large quantities of a product quickly and cheaply
the creation of value or wealth by producing goods and services
a trained worker who has special skills for a job
the development of skills in a specific kind of work
general worker who can perform any job that requires no special knowledge or skill
Workers who typically work for management in offices
productive resources consisting of human-made materials needed to produce goods and services (including buildings, machinery, equipment and tools)
goods (as food or clothing) intended for direct use or consumption
People who work to produce goods and services
Law of Diminishing Return
Economic Law that at some point increasing one factor of production only will decrease productivity
Produces Price Index (PPI)
Monthly report on the costs of production to procedures
Resources that can be used to produce other things.
Economic system in which businesses are privately owned and operated for profit and where free markets coordinate most economic activity
An economic system in which the government controls production.
political system in which the government owns and operates all factors of production
Written by Karl Marx and Friedrich Engels, arguing that the economy would be fair only if workers controlled production
when a government spends more money than it takes in
Changes in government spending or tax policy in response to a period of high unemployment
economic system in which individuals and businesses are allowed to compete for profit with a minimum of government interference
Concept in a market economy where individuals are allowed to pursue their own self-interests w/out interference by government, the actions would do what is best for society
policy based on the idea that government should play as small a role as possible in the economy
the world of commercial activity where goods and services are bought and sold
Questions are answered by households and business through a system of freely operating markets
Has characteristics of both a command and a market economy
the drive for people to make money
Government owns utilities and major businesses but permits private ownership of some business
The Keynesian Theory
government sponsered programs should increase jobs and stimulate business activity.
Wealth of Nations
Adam Smith's book that argued that the market should regulate itself.
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