chapter 1 Flashcards
choice
making a decision after considering multiple alternatives.
alternative
the different options that are available when making a choice
opportunity cost
what you give up to get something
scarcity
requires that people decide which goods and services to resources needed to produce good use or not use due to limited resources and unlimited wants/conditions of not being able to have everything that is wanted
values
something a person considers important which is supported by a set of beliefs
economics
the study of the decisions that go into making, distributing, and using goods and services.
factors of production
resources needed to produce goods and services.
land
refers to natural resources that exist and were not created by people
labor
the work that people do and includes all of their abilities, efforts, and skills.
capital
manufactured goods used to produce other goods and services
entrepreneurship
refers to the ability of individuals to start new businesses, introduce new products, and improve business processes
economy
how a nation makes decisions to allocate its resources
traditional economy
all three economics questions are answered by customs and tradition
command economy
a system in which a central authority controls all decisions
market economy
supply, demand, and a system of pricing allow people to make the economic decision through free interaction
