Chapter 3 Flashcards
Production process
Turns inputs into consumable outputs
Consumable outputs
Goods and services
Cost of natural resources
Rent
Cost of labor
Wage
Cost of capital
Interest
Cost of entrepreneurship
Profit
Technology
is the way that inputs are combined to produce output
make work fallacy
The idea that jobs are valuable, whether or not the labor’s production adds value
law of increasing opportunity cost (LIOC)
as more of one good is produced, the opportunity cost of producing a unit of that good rises, in terms of the other good which must be sacrificed
economic growth
an expansion of an economy’s productive capabilities
human capital
Individuals upgrade their labor by education and training
invisible hand
to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it
