Fundamentals Part 1
Something essential for survival.
What is a need?
Physical objects that someone produces.
What is a good?
The act of giving up one benefit to gain a better benefit.
The resources used to make goods & services.
What are the factors of production?
Combinations of the production of two goods.
Please provide an example of a need.
Examples: Food, Clothing, Shelter, etc.
Actions or activities that one person performs for another.
What is a service?
The most desirable alternative somebody gives up as a result of a decision.
The term for all natural resources.
The use of resources to maximize the output of goods & services.
What is efficiency?
Something you desire, but isn’t necessary for survival.
What is a want?
The study of how individuals, businesses, & households make decisions?
What is microeconomics?
Deciding how much more or less to do.
What is thinking at the margin?
The effort & time put into production for which someone is paid.
What is labor?
A graph that shows alternative ways to use an economy's productive resources.
What is a Production Possibilities Graph?
In a given area, this term describes the production, distribution, and consumption of limited resources.
What is an economy?
The study of how an entire economy functions.
What is macroeconomics?
What you gain by adding one unit of something.
Marginal Benefit
The physical, man-made tools, machines, and resources involved in the production process.
What is physical capital?
The use of fewer resources than the economy is capable of using.
What is underutilization?
The study of how people choose to satisfy their unlimited wants & needs using limited resources.
What is economics?
Limited resources trying to satisfy unlimited needs & wants.
What is scarcity?
Listing out the costs & benefits of a decision and then making a choice.
Cost-Benefit Analysis
The expertise, experience, skill, education, and knowledge of laborers.
When as production shifts from making one good/service, more resources are needed to increase the production of the second good/service.
What is the Law of Increasing Costs?