Chapter 1: What is Economics Flashcards
Benefit
benefit of something is the gain or pleasure that it brings and is determined by preferences.
Capital
tools, equipment, buildings, and other constructions that businesses use to produce goods and services.
Economic Model
description of some aspect of the economic world that includes only those features of the world that are needed for the purpose at hand.
Economics
social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices.
Efficient
resource use is efficient if it is not possible to make someone better off without making someone else worse off.
Entrepreneurship
human resource that organizes the other three factors of production: labour, land, and capital.
Factors of Production
productive resources used to produce goods and services.
Goods and Services
objects that people value and produce to satisfy human wants.
Human Capital
knowledge and skill that people obtain from education, on-the-job training, and work experience.
Incentive
reward that encourages an action or a penalty that discourages one.
Interest
income that capital earns.
Labour
work time and work effort that people devote to producing goods and services.
Land
“gifts of nature” that we use to produce goods and services.
Macroeconomics
study of the performance of the national economy and the global economy.
Margin
when a choice is made by comparing a little more of something with its cost, the choice is made at the margin.
