Chapter 1 Flashcards
want
a thing that we desire to have
resource
anything that can be used to produce goods or services (trees, employees, labor, etc)
scarcity
condition in which wants are greater than resources available to satisfy them
opportunity cost
the most highly valued opportunity or alternative forfeited when a choice is made.
trade-off
a situation in which more of one thing necessarily means less of something else
production possiblities frontier
graphic representation of all possible combinations of two goods that an economy can produce
rationing device
means for deciding who gets what portion of the available resources and goods
economics
science that studied the choices of people trying to satisfy their wants in a world of scarcity,
marginal
additional
incentive
something that encourages or motivates a person to take action
microeconomics
branch of economics that deals with human behavior and choices as they relate to relatively small units—an individual, a business firm, or a single market
macroeconomics
the branch of economics that deals with human behavior and choices as they relate to the entire economy
theory
an explanation of how something works, designed to answer a question for which there is no obvious answer
tangible
able to be felt by touch
intangible
not able to be felt by touch
goods
anything that satisfies a person’s wants or brings satisfaction; also, tangible products
utility
quality of bringing satisfaction or happiness
disutility
quality of bringing dissatisfaction or unhappiness
services
tasks that people pay others to perform for them
land
all the natural resources found in nature.
labor
physical and mental talents that people contribute to the production of goods and services
capital
produced goods that can be used as resources for further production
entrepeneurship
special talent that some people have for searching out and taking advantage of new business opportunities and for developing new products and new ways of doing things.
