Economic Way of Thinking Flashcards
the two basic desires of consumers-
needs
wants
a ________ is desires that can be satisfied by consuming a good
want
a _________ is basic necessities for life
need
________ is a situation in which there is not enough resources to reach human wants - affects how goods are made and the services provided
scarcity
_________ are the study of how people use scarce resources to satisfy their needs
economics
________ is central to use scarce resources
choice
_________ are work that one person preforms for another payment
services
a _______ is a person who buys goods and services
consumer
a_________ is a person who makes the goods or services
producer
Three basic economic questions that scarcity requires
what is to be produced
how is it produced
for whom will it be produced
____________–are the resources needed to make something
factors of production
four categories of the factors of production
land
labor
capital
entrepreneurship
__________ includes all natural resources found on earth
land
________ is human time and effort
labor
___________ is the resources used by people to do something
capital
__________ is knowledge and skill gained through experience
human captital
____________ is the combination of vision and skill to operate a business - are risk takers, risking time and money to make a profit
entrepreneurship
_________ are methods used to get people to to take a certain action
incentives
_________ is the benefit/satisfaction received from doing something
utility
___________ means making decisions according to the best combination of cost ad benefits
economize
____________ can take the form of money/time/something you value
every choice involves ________ as well
costs
____________ do not require all or nothing choices
trade offs
_________ is the value of the next best alternative, what you give up for choosing one decision over another
opportunity cost
examining the cost and expected benefits of a choice as an aid to make a decision, most useful tool to evaluate the worth of choices
cost benefit analysis
_______________ shows what you get and what you give up when making choices
decision making grid
_________ is the additional cost of using one more unit of product
Marginal cost
___________ is the additional satisfaction from using one more unit of product
marginal bebefit
____________ is a graph constructed by economist to show the impact of scarcity on an economy
production possibilities frontier
__________ is a latin phrase used in economics to mean all things being held equal or constant
ceteris paribus
the ________ shows the border between what is possible to produce and what is not
PPF
__________is when resources are being used to produce the maximum amount of goods
efficiency
__________ is when resources are not being used to full potential
underutilization / inefficiency
things that make the PPF shif outward
economic growth
technology
things that make PPF shift inward
natural disaster
war/sickness
