Unit 1
The study of how people seek to satisfy their needs and wants by making choices
economics
an alternative that we sacrifice when we make a decision
trade-off
To an economist, the alternative that is given up because of a decision
cost
Need
something like air, food or shelter that is necessary for survival.
any human-made resource that is used to create other goods and services
capital
Actions or activities that one person performs for another person.
services
the most desirable alternative given up as the results of a decision
opportunity cost
using fewer resources than an economy is capable of using
underutilization
Labor
the effort that people devote to a task for which they are paid
physical objects such as clothes or shoes
goods
A situation in which a good or service is unavailable
shortage
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You get free points! It is your lucky day!
using resources in such a way as to maximize the production of goods and services
efficiency
Scarcity
limited quantities of resources to meet unlimited wants
land, labor and capital; the three groups of resources that are used to make all goods and services
factors of production
Natural resources that are used to make goods and services
land
deciding whether to do or use one additional unit of some resource
thinking at the margin
production possibilities frontier
Want
an item that we desire but that is not essential to survival
The skills and knowledge gained by a worker through education and experience
human capital
All human-made goods that are used to produce other goods and services; tools and buildings
physical capital
a phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods
guns or butter
a graph that show alternative ways to use an economy's resource
production possibilities
Law of increasing costs
law that states that as we shift factors of production from making one good or service to another, the cost of producing the second item increases
Ambitious leader who combines land, labor, and capital to create and market new goods and services