BASIC ECON TERMS
The study of how people use scarce resources to satisfy wants.
Economics
Goods made for direct use by consumers.
What are consumer goods?
All alternatives given up when making a choice.
What is a trade-off?
An economy where private businesses make most decisions.
What is a free enterprise economy?
The basic economic problem of unlimited wants and limited resources.
What is scarcity?
People who start businesses and take risks to earn profit.
What is an entrepreneur?
Tools or machines used to make other goods.
What are capital goods?
The next best alternative given up when a decision is made
What is opportunity cost?
Relying on others for goods and services while they rely on you.
What is economic interdependence?
The factor of production that includes risk-taking and innovation.
What is entrepreneurship?
– A simplified graph, diagram, or explanation of how something works.
What is an economic model?
Resources used to produce goods and services.
What are factors of production?
A method that compares expected benefits to expected costs.
What is cost-benefit analysis?
An increase in a nation’s total output over time.
What is economic growth?
Better education and training increase this.
What is productivity or human capital?
The skills, education, and health of workers.
What is human capital?
The market where land, labor, capital, and entrepreneurship are bought and sold.
What are factor markets?
Choosing to work instead of going to a movie—what is the movie an example of?
What is an opportunity cost?
Measuring how much is produced with a certain amount of resources.
What is productivity?
Specialization often leads to this positive economic outcome.
What is increased productivity?
A way of organizing work so each worker completes a different task.
What is division of labor?
People and their efforts, abilities, and skills.
What is labor?
When scarcity forces people to choose between limited options.
What are trade-offs?
Businesses buy labor and other resources in this type of market.
What are factor markets?
Explains how scarcity leads to opportunity cost and trade-offs.
What is economics?