Week 1 Flashcards
o 4 M’s
Manpower, Money, Machinery, Materials.
Product to product exchange
Barter System
Human efforts (Labor), derived from time.
Manpower
Includes all human creations used to produce goods and services
Capital
Factories, tools, machines, etc. Other human creations used to produce goods and services
Physical Capital
Consists of knowledge and skill people acquire to increase their productivity. Creativity, abilities, wisdom, education, judgment, training, and experience
Human Capital
Gifts of nature, like bodies of water, minerals, oil
Natural Resources
Tangible items that require scarce resources
Goods
Intangible offerings that satisfy wants
Service
Play the starring role in Demand goods/services, supply labor, capital, resources.
Households
Maximize benefit at a given cost or minimize cost for a given benefit.
Rational Self-Interest
Small adjustments to current conditions.
Marginal Analysis
A statement that can be proved or disproved by reference to facts (Fact)
Positive Economic Statements
A statement that reflects an opinion, which cannot be proved or disproved by reference to facts.
Normative statement
Bringing products into a country.
Importation
Sending products out.
Exportation
Backup plan.
Contingency Plan
The Economic Problem
Scarcity
