Economics scarcity resources capital etc – Flashcards
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study of how people acting individually and in groups, decide to use their limited resources to satisfy unlimited wants
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economics
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gap between what people want and the resources available to meet those wants--when there aren't enough resources to meet demand An inequality exists between wants and the resources available to satisfy the wants
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scarcity
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not the same as scarce
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rarity
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factors that influence economic decisions
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needs versus wants, income, cost/price, incentives (positive and negative), benefits (gains)
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the highest valued alternative as a result of making a choice
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opportunity costs
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When considering a choice, thinking about these three questions:
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1. What alternative opportunities are there? 2. Which is the best of these alternative opportunities? 3. What would I gain if I selected my best alternative opportunity instead of the choice I'm considering?
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factors of production
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land, capital, labor, entrepreneurship
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services and goods
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goods and services
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natural resources are unaltered gifts of nature (soil, minerals, timber, fresh water). One of the factors of production.
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land
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a factor of production; the physical and mental efforts people use to create goods and services
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labor (human resources)
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a factor of production; buildings, tools, and machines people create and use to produce final goods and services
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capital
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a factor of production; imagination, innovative thinking, and management skills needed to start and operate a business.
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entrepreneurship
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shows all the combinations of goods and services that can be produced if all of societies resources are used efficiently. There is a negative slope--there is a trade off between producing one good versus another good.
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production possibilities curve
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economic thinking
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incentives and disincentives (costs and benefits)
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all choices involve costs
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costs
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people respond to _________________, or positive rewards
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incentives
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choices are _____________________ oriented.
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future
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people think at the __________________ and think about additional costs and benefits about their possible choice.
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margin
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three resources involved in production
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land, labor, capital
