Unit 1 Flashcards
utility
measurement of satisfaction that a good gives
opportunity cost
what is given up (not time, but what you would have done with that time ex study)
market economy
money and goods controlled by the people
command economy
resources owned by the government and they decide what to do with those resources.
Cost-benefit analysis
Benefit be cost (money and opportunity cost)
Scarcity
Limited resources
Land
All natural resources (air, water, oil)
Labor
Workers (16 and older)
Capital (physical capital or capital stock)
Machinery and or equipment used in the production of a good or service
Financial capital
Money needed to start a business
Entrepreneur
People that take resources and create something new (take the risks)
Human capital
Labor; measures skill (traits) set and knowledge level of a population
—> more edu = higher human population
Production possibility curve (frontier)
Current available resources
- represents the current possibilities of production with the current level of resources available (all resources)
Allocate
Distribute/ divide resources
Efficient
Using all resources
—> may not be the best for society
