Unit One Flashcards
Economics
Economics is the study of how people satisfy wants with their scarce resources.
Microeconomics
The study of the choices made by economics such as households, companies, and individuals.
Macroeconomics
Examines the behavior of entire economies.
Goods
Physical objects that someone produces: ie. food, clothing, etc.
Services
Are actions or activities that one person performs for another: ie. medical care, plumber, etc.
Scarcity
The condition where unlimited human wants face limited resources.
Shortage
Occurs when consumers want more of a good or service that producers can or are willing to make available at a particular price.
Entrepreneurs
Are the people who decide how to combine resources to create new goods and services. (Starting a business small or big)
Factors of Production
Resources necessary to produce what people want or need.
Physical Capital
Human made objects used to create other goods and services
Human Capital
The knowledge and skills a worker gains through education and experience
Analysis
Looks at the “why” and “how” of economic activity–why prices go up or down, for example, or how taxes affect savings.
Explanation
Refers to how economists communicate knowledge of the economy and its activities to the society’s population.
Prediction
Refers to how yesterday’s and today’s economic activities advise us of potential future activity.
Durable Goods
Goods that last for at least 3 years when used regularly.