Economics (Chapter 1) – Flashcards
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An action or activity done for others for a fee
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service
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Anything that people use to make what they need or want
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resources
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Any human effort exerted in the production process
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human resources
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The use of technical knowledge to create new products or make existing products more efficiently
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technology
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A person who attempts to start a new business or introduce a new product
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entrepreneur
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The study of the choices people make to satisfy their needs and wants is called...
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economics
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The people who decide to buy things are called...
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consumers
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The factors of production are...
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natural resources, human resources, capital resources, and entrepreneurship
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The building, structures, machinery, and tools used in the production process are called...
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capital goods
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What is the goal of entrepreneurship?
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To develop a new combination of the other factors of production, thereby creating something of value.
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The study of choices made by economic actors such as households, companies and individual markets is called what?
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microeconomics
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What examines the behavior of entire economies?
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macroeconomics
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What are natural resources?
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Items provided by nature that can be used to produce goods and provide services.
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Examples of natural resources
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farmland, oil fields, trout filled rivers, coal mines
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What are human resources?
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Human effort exerted during production
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Example of human resources
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assembly line workers
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What are capital resources?
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Manufactured materials used to create products
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Examples of capital resources
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department stores
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What is entrepreneurship?
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Organizational abilities and risk taking involved in starting a new business or creating a new product.
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Examples of entrepreneurship
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Steve Jobs, Michael Dell
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What is scarcity?
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The fundamental condition of economics that result from the combination of unlimited resources.
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What are the three questions all economic systems must address?
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What to produce, how to produce and for whom to produce
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Does scarcity require people to make decisions about how to use resources?
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Yes
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What studies productivity to decide how to distribute the goods and services they produce?
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Economists
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What is the name given when the level of output that results from a given level of input.
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productivity
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What might improve efficiency by introducing a division of labor?
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factories
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What is the condition that results from the combination of limited resources and unlimited wants?
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scarcity
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To distribute resources in order to satisfy the greatest number of needs and wants is called what?
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allocate
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The use of the smallest amount of resources to produce the greatest amount of output is called what?
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efficiency
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Assigning a small number of tasks to each worker is called what?
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Division of labor
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Focusing on a particular activity is called what?
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Specialization
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Scarcity requires...
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choices
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A production possibilities curve illustrates all of the...
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combinations of two goods or services that can be produced
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A production possibilities curve is a...
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model of reality based on specific assumptions
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An assumption in making a product possibility curve is that...
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technology will not change during the period being studied
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An increase in available resources will have which of the following effects on the production possibility curve?
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The curve will shift to the right.
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What is the sacrifice of one choice for another called?
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trade-off
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What is the value of the next best alternative given to obtain an item is called what?
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opportunity cost
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What is an important element of economic choice is called what?
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sacrifice
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What shows all of the possible combinations of two goods or services produced within a stated time period?
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production probability curve
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What is a simplified version of reality based on assumptions relating to current conditions?
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models
