Paradox of Value
Explains that the scarcity of an item affects its value
full employment
All available resources are being used
Full Production
Resources being used are providing the most satisfaction of our economic wants as possible
Trade-Offs
ALL the alternatives a person gives up when he makes a choice
Economic Interdependence
Businesses households, and the gov't all depend on each other in order for the economy to run smoothly
Factor Market
Where the 4 factors of production are bought and sold
Product Market
Where firms sell their goods and services and people buy them
Marginal Benefits
Utility (usefulness) gained from that last unit
Marginal Costs
The last unit produced or consumed
Economic Incentive
Offered to encourage people to make certain choices or behave in a certain way
Positive economic incentives
These incentives benefit you in some way
Negative economic incentives
These incentives cost you money
Production possibilities Curve
Graph representing the various combinations of good/services a business/firm can produce when all resources are used (also called production possibilities frontier)
Specialization of Labor
Worker does the task at which he is best
Division of Labor
Dividing task into smaller tasks
Consumer Good
A final good that is meant for use by a consumer
Capital Good
A final good that is used by a business to make another final good
Human Capital
The ability, talents, etc. of a person that make them economically useful