EPP Chapter 1: Section 1 – Scarcity and the Science of Economics

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scarcity
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fundamental economic problem of meeting people’s virtually unlimited wants with limited resources
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economics
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social science dealing with how people satisify seemingly unlimited and competing 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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factors of production
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productive resources that make up the four categories of land, capital, labor and entrepreneurs
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land
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natural resources or other “gifts of nature” not created by human effort
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capital or capital goods
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tools, equipment, and factories used in the production of goods and services; things made by human effort to produce goods and services
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labor
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people with all their efforts, abilities, and skills
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entrepreneur
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risk-taking individual who acquires and organizes the factors of production in search of profits
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gross domestic product (GDP)
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the dollar value of all final goods, services, and structures produced within a country’s borders during a one-year period

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