Econ - Chapter 1 Vocab

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Terms in this set (...)

Scarcity
A situation in which unlimited wants exceed the limited resources available to fulfill those wants
Need
Basic requirement for survival.
Want
A desire, not necessary for survival.
Factors of Production
Land, labor, and capital; the three groups of resources that are used to make all goods and services
Labor
Human effort directed toward producing goods and services
Capital Goods
Buildings, machines, technology, and tools needed to produce goods and services.
Gross Domestic Product
The sum total of the value of all the goods and services produced in a nation
Durable Good
Goods that last a relatively long time, such as cars and household appliances
Non-Durable Good
Goods that last a short period of time, such as food, light bulbs, and sneakers. (Typically these goods last 3 years or less.)
Service
Activities performed by people, firms or government agencies to satisfy economic wants.
Value
A consumer's subjective assessment of benefits relative to costs in determining the worth of a product
Utility
Ability or capacity of a good or service to be useful and give satisfaction to someone.
Market
A group of buyers and sellers of a particular good or service
Productivity
The ratio of the quantity and quality of units produced to the labor per unit of time. A measure of the goods and services produced within a particular country.
Division of Labor
Division of work into a number of separate tasks to be performed by different workers
Specialization
Goods and services are produced in better quality, quantity and speed when people focus on producing a few things instead of making everything they want by themselves. A situation in which different people each engage in a different task
Economic Interdependence
The characteristic of a society in which people rely on others for most of the goods and services they want. This results from specialization and trade. A reliance on others, as they rely on you, to provide goods and services to be consumed
Trade Off
Alternative that must be given up when one choice is made rather than another.
Opportunity Cost
Cost of the next best alternative use of money, time, or resources when one choice is made rather than another, The highest-valued alternative that must be given up to engage in an activity.
Cost Benefit Analysis
A way of comparing the costs of an action to the benefits received.
Free Enterprise Economy
Market economy in which privately owned businesses have the freedom to operate for a profit with limited government intervention.
Standard of Living
A measure of quality of life based on the amounts and kinds of goods and services a person can buy.