Chapter 1 Economics -McGraw Hill – Flashcards
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transferable
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capable of being passed from one person to another
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accumulation
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gradual collection of goods
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intangible
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not physical; something that cannot be touched
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comprehensive
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covering many or all areas
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scarcity
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fundamental economic problem of meeting people's virtually unlimited needs and wants with scarce resources
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economics
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social science dealing with how people satisfy seemingly unlimited and competing needs and wants with the careful use of scarce resources
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need
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basic requirement for survival, including food, clothing, and shelter
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want
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something we would like to have but is not necessary for survival
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good
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tangible economic product that is useful, transferable to others, and used to satisfy wants and needs
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durable good
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good that lasts for at least three years when used regularly
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nondurable good
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item that wears out, is used up, or lasts for fewer than three years when used regularly
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consumer good
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good intended for final use by consumers other than businesses
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capital good
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tool, equipment, or other manufactured good used to produce other goods and services; factor of production
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service
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work or labor performed for someone; economic product that includes haircuts, home repairs, and forms of entertainment
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value
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monetary worth of a good or service as determined by the market
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paradox of value
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apparent contradiction between the high value of a nonessential item and the low value of an essential item
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utility
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ability or capacity of a good or service to be useful and give satisfaction to someone
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wealth
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sum of tangible economic goods that are scarce, useful, and transferable from one person to another; excludes services
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gross domestic product (GDP)
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monetary value of all final goods, services, and structures produced with a country's borders within a one year period
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factors of production
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productive resources needed to produce goods; the four factors are land, capital, labor, and entrepreneurship
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land
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natural resources or "gifts of nature" not created by human effort; one of the four factors of production
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capital
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tools, equipment, and factories used in the production of goods and services; one of the four factors of production; does not include the entrepreneur
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labor
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people with all their abilities and efforts; one of the four factors of production; does not include the entrepreneur
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entrepreneurs
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risk-taking individuals who introduce new products or services in search of profits; one of the four factors of production
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production possibilities curve
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diagram representing all possible combinations of goods and/or services an economy can produce when all productive resources are fully employed
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trade-off
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alternative that must be given up when one choice is made rather than another
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opportunity cost
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cost of the next best alternative use of money, time, or resources, when one choice is made rather than another
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consumerism
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a social movement that was aimed at promoting the interests of consumers
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mechanism
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process or means by which something can be accomplished
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assumption
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something taken for granted; something we think is true
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economic growth
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increase in a nation's total output of goods and services over time
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productivity
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measure of the amount of output produced in a specific time period with a given amount of resources; normally refers to labor, but can apply to all factors of production
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human capital
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sum of people's skills, abilities, health, and motivation
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division of labor
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division of work into a number of separate tasks to be performed by different workers
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specialization
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assignment of tasks to the workers, factories, regions, or nations that can perform them most efficiently
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economic interdependence
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mutual dependence of the economic activities of one person, company, region, or nation on those of another person, company, region, or nation
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market
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meeting place or mechanism through which buyers and sellers of an economic product to come together; may be local, regional, national, or global
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factor market
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market in which productive resources are bought and sold
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product market
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market in which goods and services are bought and sold
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economic model
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simplified version of a complex concept or behavior expressed in the form of a graph, figure, equation, or diagram
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cost-benefit analysis
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comparison of the cost of an action to its benefits
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free enterprise economy
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market economy in which privately owned businesses have the freedom to operate for a profit with limited government intervention
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standard of living
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quality of life based on ownership of necessities and luxuries that make life easier
