Chapter 1-Section 2 Flashcards
An item that is economically useful or satisfies an economic want
Good
Goods and services that are useful, relatively scarce, and transferable to others
Economic products
Intended for final use by individuals
Consumer good
Manufactured goods are used to produce other goods and services
Capital goods
Any good that lasts three or more years when used on a regular basis
Durable good
An item that lasts for less than three years when used on a regular basis
Non durable goods
Work that is performed for someone
Service
What is the difference between a good and service?
A service is intangible
A person who uses goods and services to satisfy wants and needs
Consumer
Refers to a worth that can be expressed in dollars an cents
Value
The situation where some necessities have little monetary value, whereas some non-necessities have a much higher value
Paradox of value
Capacity to be useful and provide satisfaction
Utility
For something to have value it must be scarce and have utility. True it false?
True
Accumulation of those products that are tangible, scarce, useful, and transferable from one person to another
Wealth
Goods are counted as wealth, but services aren’t. Why?
Services are intangible
A location or other mechanism that allows buyers and sellers to exchange a certain economic product
Market
Markets where productive resources are bought and sold
Factor markets
Entrepreneurs can hire labor, acquire land, and borrow money in what market?
A factor market
Markets where producers sell their goods and services to consumers
Product markets
After individuals receive their income from the resources they sell where do they spend it?
Product market
Occurs when a nation’s total output of goods and services increases over time
Economic growth
A measure of the amount of output produced by a given amount of inputs in a specific period of time
Productivity
Productivity is often discussed in terms of what?
Labor
Takes place when work is arranged so that individual workers do fewer tasks than before
Division of labor
Takes place when factors of production perform tasks that they can do relatively more efficiently than others
Specialization
The sum of the skills, abilities, health, and motivation of people
Human capital
We rely on others, and others rely on us, to provide the goods and services that we consume
Economic interdependence
What is a key to circular flow?
Market
How dothe division of labor and specialization affect productivity?
Increases productivity dramatically
In what ways can government, businesses, and individuals invest human capital?
Government: education and health care; businesses: training people in skills; individuals: completing high school, going to college
