“I Want It That Way"
the idea that resources are limited, so some people’s needs and wants will not be fulfilled
scarcity
anything that motivates or encourages a behavior
incentive
potential benefit of the next best alternative that is given up when a choice is made
opportunity cost
measurement of the quantity of output produced per unit of input, or resource
productivity
breakdown of a work process into separate tasks, with each task being completed by one worker or group of workers
division of labor
social science studying the decisions individuals, businesses, and governments make with their scarce resources as they attempt to satisfy their unlimited needs and wants
economics
a __________ is made when the marginal benefit of an action is greater than or equal to the marginal cost
rational decision
usefulness or satisfaction a person gets from consuming a good or service
utility
a model used in economics to analyze tradeoffs and opportunity costs.
production possibilities curve or frontier (PPC or PPF)
when a person within a society practices a specific skill or profession
specialization
goods and services necessary for survival
needs
branch of economics that studies the effects of the decisions made by single economic units, like individual people and businesses
microeconomics
The word ________ in economics is synonymous with additional; specifically, one more.
marginal
production at a point outside the production possibilities curve/frontier is _________
impossible
total market value of all finished goods and services produced in an economy during a 12-month period
gross domestic product (GDP)
goods and services people would like to have but are not necessary for survival
wants
study of the economy on a national and an international scale and the effects of the decisions made by large economic units, like governments
macroeconomics
amount people are willing to exchange, such as money or time, to obtain something
value
production at a point within the production possibilities curve is _________
inefficient
total market value of all finished goods and services produced within a 12-month period, divided by the population of the country
gross domestic product (GDP) per capita
What are the “three questions” that scarcity leads societies to address?
What to Produce, How to Produce, Who to Produce It For
formal assessment of the costs and benefits of all options available in a given decision
cost-benefit analysis
When we wonder about the amount of a specific action to take, we are thinking on the _______
margin
the four factor of productions
land, labor, capital, entrepreneurship
Increasing Resources, Increasing Productivity, Investing in Capital, and Specialization all ______ the production possibilities curve/frontier
increase/expand