Section 1
What is the fundamental economic problem?
Scarcity
A good that lasts for fewer than 3 years when used on a regular basis?
Nondurable good
Alternative choices
A basic requirement for survival
Need
Work that is performed for someone?
Service
Cost of the next best alternative use of money, time, or resources when making a choice
Opportunity Cost
The tools, equipment, machinery, and factories used to produce goods
Capital Goods
Markets where producers sell their goods and services.
Products Markets
Diagram representing various combinations of goods and services an economy can produce when all its resources are in full use.
Production Possibilities Frontier
What are the 3 basic questions economies must answer to make choices?
WHAT to produce?
HOW to produce?
FOR WHOM to produce?
Concept when some non-necessities have a very high value.
Paradox of Value
A way of comparing the costs of an action to the benefits received.
Cost-benefit analysis
What does GDP stand for?
Gross
Domestic
Product
The measure of the amount of goods and services produced with a given amount of resources within a specific period of time
Productivity
Market economy in which privately owned businesses have the freedom to operate for profit with limited government intervention
Free Enterprise Economy