Economics Chapters 1-2 Flashcards
actions that can satisfy people’s wants or needs
services
amount earned after a business subtracts its costs from its revenues
profit
basic economic problem that results from a combination of limited resources and unlimited wants
scarcity
desire to make money that motivates people to produce and sell goods and services
profit incentive
resources of land, labor, capital, and entrepreneurship used to produce goods and services
factors of production
rivalry among producers or sellers of similar goods and services to win more business
competition
sacrificing one good or service in order to purchase or produce another
trade-off
system in which individuals own the factors of production
capitalism / market economy
system in which the government controls the factors of production and makes all decisions about their use
communism / command economy
tangible objects that can satisfy people’s wants or needs
goods
the amount of output (goods and services) that results from a given level of inputs (land, labor, capital, and entrepreneurship)
productivity
the material well-being of an individual, group, or nation measured by how well their necessities and luxuries are satisfied
standard of living
the process of freely exchanging goods and services between buyers and sellers
market
economic system in which the government minimizes its interference in the economy
laissez-faire
the production and distribution of goods and services in a society
economy
the use of science to develop new products and new methods for producing and distributing goods and services
economy
whatever is owned by individual rather than government
private property
when individuals take risks to develiop new products and start new businesses in order to make profits
entrepreneurship
value of the next best alternative given up for the alternative that was chosen
opportunity cost
human effort directed toward producing goods and services
labor
natural resources and surface land and water
land
previously manufactured goods used to make other goods and services
capital
