economics test chapter 1 study guide – Flashcards
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value
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monetary worth of a good or service determined by market
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economics
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the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants
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capital
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tools,equipment,and factories used in production of goods and services
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scarcity
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economic problem of meeting people's wants with scarce resources
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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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wealth
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the accumulation of products that are tangible, scarce, useful, and transferable from one person to another
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labor
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people with all their efforts, abilities, and skills.
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trade offs
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alternative choices
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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
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good
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a useful tangible item that satisfies a want
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importance of economics
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to understand how and why the world changes, and appreciate how we affect the world and vise versa
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paradox of value
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needs are cheap and wants are expensive
