economics test chapter 1 study guide

value
monetary worth of a good or service determined by market
economics
the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants
capital
tools,equipment,and factories used in production of goods and services
scarcity
economic problem of meeting people’s wants with scarce resources
opportunity cost
cost of the next best alternative use of money, time, or resources when one choice is made rather than another
wealth
the accumulation of products that are tangible, scarce, useful, and transferable from one person to another
labor
people with all their efforts, abilities, and skills.
trade offs
alternative choices
standard of living
quality of life based on ownership of necessities and luxuries that make life easier
good
a useful tangible item that satisfies a want
importance of economics
to understand how and why the world changes, and appreciate how we affect the world and vise versa
paradox of value
needs are cheap and wants are expensive

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