Economics Midterm Flashcards
_____ is the study of how people seek to satisfy their needs and wants by making choices.
Economics
The study of economics begins with the idea that people cannot have everything the _____ and _____
Want, need
_____ occurs when there are not a lot of goods and services available.
Scarcity
_____ is different from scarcity.
Shortage
There is always scarcity because people always need and want more than there _____ is.
Actually
_____ __ _____are the resources that are used to make all goods and services
Factors of production
_____ refers to all natural resources
Land
_____ is the effort that a person devotes to a task for which that person is paid
Labor
There are two categories of capitol:
Physical and human
_____ _____ human-made objects used to create other goods and services.
Physical capital
_____ _____ the knowledge and skills a worker gains through education and experience
Human capital
Labor, land, and capital are all _____ __ _____
Factors of production
_____ are leaders who decide how to combine the factors of production to create new goods and services.
Entrepreneurs
Everyone makes decisions that involve _____-_____
Trade-offs
_____ __ _____ is a phrase used to describe the economic trade-offs whole nations face
Guns or butter
The most desirable alternative given up is referred to as _____ _____
Opportunity cost
Thinking at the margin means:
deciding whether to do or use one additional unit of some resource.
Making a decision at the margin requires you to look at the _____ _____ of each decision and compare the benefits.
Opportunity cost
This decision making process is sometimes called _____\_____ _____
Cost/benefit analysis
A _____ _____ _____ is a graph that shows alternative ways to use an economy’s productive resources
Production possibility curve
The _____ _____ _____ is the line made on the graph connecting all of the points
Production possibility frontier
_____ means to maximize the possible production or output of resources.
Efficiency
Any point inside the production possibilities frontier indicates an _____
This means that there are fewer resources being used than the economy is capable of using.
Underutilization
_____ can also show economic growth and future possibilities.
●When an economy grows, economists say the curve as “shifted to the right”.
●When a country’s production capacity has decreased, the curve shifts to the left.
Graphs
_____ does not always equate to money
Cost
_____ __ _____ _____ as we shift factors of production from making one good or service to another, the cost of producing the second item increases
Law of increasing costs
A country’s production possibilities depend on both its _____ _____ and the _____ it has available
Technological level, resources
