WEEK 1 Flashcards
Are used as the production’s inputs or components to create the goods and services that consumers demand.
RESOURCES
is human effort, both physical and mental.
MANPOWER
Consists of factories, tools, machines, computers, buildings, airports, highways, and other human creations used to produce goods and services.
Physical Capital
includes all human creations used to produce goods and services.
CAPITAL
Consists of the knowledge and skills people acquire to increase their productivity.
Human Capital
include all gifts of nature, such as bodies of water, trees, oil reserves, minerals, even animals..
Natural Resources
It is something you can see, feel, and touch; it requires scarce resource to produce; and it satisfies human wants.
GOODS
It is intangible, yet it uses scarce resource to satisfy human wants.
SERVICE
four types of decision markets in the economy:
households, firms, government, and the rest of the world.
Play the starring role; As consumers, this demands the goods and services produced. As resource owners, this supply labor, capital, natural resources, and entrepreneurial ability to firms, governments, and the rest of the world.
households
demand the resources that households supply and the use of these resources to supply the goods and services that households demand.
Firms, governments, and the rest of the world
means that each individual tries to maximize the expected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit.
Rational Self-Interest
studies the performance of the economy as a whole.
Macroeconomics
is the study of your economic behavior and the economic behavior of others who make choices; examines individual economic choices and how markets coordinate the choices of various decision-makers.
Microeconomics
, is a simplification of economic reality that is used to make predictions about cause and effect in the real world.
An economic theory, or economic model.
