Unit 1 Flashcards
Define Economics
How people use scarce and limited resources to satisify wants and needs
Define a need
basic survival requirement
Define a want
Not a necessity or a way of expressing a need
To be scarce somethings needs to be these 3 qualities
Desired, limited, useful in more than one way
Define utility
amount of usefulness or satisfaction one gets from using something
Marginal utility
the extra amount of enjoyment we get from an extra item
What is diminishing marginal utility
Your appreciation goes down as you use something or acquire something more and more
What is opportunity cost
the cost of the next best alternative use of money or resources
What are microeconomics
The study of decision making by small groups or individuals
What is Macroeconomics
Decision making by large groups of people
what are the 4 factors of production
Land, labor, capital and entreprenours
What is capital
A good or resource that can be used to produce goods or services
What is a good
an economic product that is tangible
What is a service
work performed for someone
What is value
monetary expression of an item
A consumer is
one who buys goods or services
consumer goods are
items bought for by and for consumer use
Durable goods are
Items that can last for 3 years or more
Wealth is
Accumulation of those products that are tangible, scarce, useful and transferable from one person to another
Comparative advantage is
the ability to produce something at a lower opportunity cost that other producers
What is the law of comparative advantage
an individual, firm, or region with the lowest opportunity cost of producing a good should specialize in that good
What is absolute advantage
the ability to produce something using the fewewst resources that other producers
Why do people trade
because everyone thinks that they are getting the better end of the deal
Do people spend more on wants or needs
wants
What is a budget
an organized plan for spending money
