Intro to Economics Flashcards
study of how people use scarce resources to satisfy their wants
economics
the situation that exists because wants are unlimited and resources are limited
scarcity
desires that can be met by consumer products
wants
things necessary for survival
needs
physical objects that can be bought
goods
work one person does for another for pay
services
person who buys goods or services for personal use
consumer
person who makes a good or provides a service
producer
what are the economic questions
what will be produced, how will it be produced, and for whom will it be produced
what is it called when a country lets producers and consumers decide what will be produced
market economy or capitalism
if a country has an unskilled labor force, what kind of labor methods will they likely use
labor intensive
if a country has a skilled labor force, what kind of labor methods will they likely use
capital intensive
what are the four factors of production
land, labor, capital, and entrepreneurship
benefits that encourage people to act a certain way
incentives
benefits or satisfaction gained from using a good or service
utility
alternative people give up when they make a choice
trade-off
the value of the next-best thing alternative that a person gives up
opportunity cost
examination of costs, expected benefits of choices
cost-benefit analysis
the additional cost of using one more unit of a good or service
marginal cost
additional benefit of using one more unit of a good or service
marginal benefit
simplified representations of economic forces
economic models
what simplifies economic interactions
Production Possibilities Curve (PPC)
producing fewer goods and services than possible
underutilization
producing the maximum number of goods and services possible
efficiency
numerical data or information
statistics
behavior of individual players in an economy
microeconomics
behavior of economy as a whole
macroeconomics
describes and explains economic behavior as it is
positive economics
studies what economic behavior should be
normative economics
what guides marketplaces, benefits, sellers, and buyers
Invisible hand
