1 Flashcards
three core choices confront every nation
what to produce with limited resources
how to produce the goods and serves
for whom goods and services are produced
the economy is based on what
everyone in that nation, if people are working more it will be better if not worse
every nation has the core problem scarcity
there arnt enough resources avalible to satisfy all our desires
the four basic factors of production
resource inputs used to produce goods and services land labor capital entrepreneurship
land refers to
not only ground but oil, water, air, and materials
what is labor
factor of production, we refer to the skills and abilities to produce goods and services, quantity and quality
what is capital
final goods produced for use in further production
what is entrepreneurship
the person who sees the opportunity for new or better products and brings together he resources for producing them
what is opportunity cost
what is given up to get something else
law of increasing opportunity costs
give up ever increasing quantities of other goods and services in order to get more of a particular good
efficiency
squeezing maximum output out of available resources
economic growth
an increase in output (real gdp) an expansion of production possibilities
market mechanism
the use of market proces and sales to signal desired outputs
laissez faire
leave it alone
in a production possibility curve for two goods, combinations of goods that fall on the curve are
utilize all of an economy’s resources
are efficiently produced
are attainable
