Economics Chapter 1 Vocab Flashcard
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is the study of choice under the under conditions of scarcity
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Economics
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exists if we desire something more than we can have.
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Scarcity
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when you give up one thing to get something else.
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Tradeoff
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is the value of the next best alternative given up when that choice was made.
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Opportunity Cost
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are physical items produced in an economy, such as jeans, tennis rackets,popcorn, cars, and homes.
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Goods
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are activities produced in an economy, such as education, entertainment, and health care.
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Services
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is a system for coordinating the production and distribution of goods and services. Form when our societies seek to satisfy their needs and wants.
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Economy
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is a simplified representation of reality. These help you focus on a few aspects of the real world by stripping away nonessential details.
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Model
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is a curve that shows the maximum quantity of one good that can be produced for each possible quantity of another good produced.
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Production possibilities frontier, or PPF
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if there is no opportunity to make someone better off without making anyone else worse off.
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Efficient
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is the study of the economy as a whole.
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Macroeconomics
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is the study of what the world is like and why it works the way it does.
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Positive economics
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is the study of the way things should be rather than the way things are.
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Normative economics
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is not a place but a collection of buyers and sellers, wherever they may be.
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Market
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These people study choices of how we choose to spend our time and our money.
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Economists
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are the basic elements from which all goods and services are produced. Land, labor, capital, entrepreneurship
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Resources
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anything drawn from nature for use in the production of goods and services. Ex. sunlight
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Land
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is the time and effort people contribute to the production process Ex. farmer planting seeds, construction worker pouring cement.
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Labor
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anything long lasting that is created by humans for use in production.
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Capital
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any long lasting good that is used to make other goods. Ex. Mixer...it is a good that makes other goods like cookies.
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Physical Capital
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refers to the skills and knowledge of workers. Ex. The baker's knowledge of how to make the best chocolate chip cookies (use coarse salt)
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Human Capital
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willingness of people to organize operate and assume the risks involved with business ventures.
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Entrepreneurship
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boundary or border
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Frontier
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is the study of how people make decisions and how those decisions affect others in the economy.
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Microeconomics
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to use more resources than necessary to produce a good.
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inefficient
