Vocab 1
The study of scarcity and choice.
What is economics
Desires that can be satisfied by consuming a good or service
What are wants
Basic requirements for human survival
What are needs.
The limited nature of society's resources
What is scarcity
Land, labor, and capital; the three groups of resources that are used to make all goods and services
What are factors of Production
Raw materials from nature that are used to produce goods
What are natural resources?
People who work to produce goods and services
What are human resources
The human-made objects used to create other goods and services
What is physical capital
A person who starts up and takes on the risk of a business
What is an entrepreneur
The most desirable alternative given up as the result of a decision
What is opportunity cost
The cost added by producing one additional unit of a product or service.
What is marginal cost
The additional benefit associated with an action.
What is marginal benefit
A reward or other enticement that encourages a behavior
What is positive incentive
A penalty that discourages a behavior
What is negative incentive
The development of skills in a specific kind of work; division of labor
What is specialization
The principle that people may decide what, when, and how they want to buy and sell
What is voluntary exchange
The methods societies use to produce and distribute resources.
What are economic sysytems
An economy consisting of mostly subsistence agriculture.
What is traditional economy
An economic system in which the government controls a country's economy.
What is command economy
Market-based economic system with limited government involvement
The line on a production possibilities graph that shows the maximum possible output
What is production possiblities frontier
The products and/or services that an organization produces
What is outputs
The specific economic resources used in producing goods and services
What is inputs
The value of a particular product compared to the amount of labor needed to make it.
What is productivity
An economic system in which resources are primarily owned and controlled by the private sector
What is a free market economy