econ unit 1 vocab

need

something essential for survival

want

something that people desire but that is not necessary for survival

goods

the physical objects that someone produces

services

the actions or activities that one person performs for another

scarcity

the principle that limited amounts of goods and services are available to meet unlimited wants

economics

The study of how people seek to satisfy their needs and wants by making choices

factors of production

the resources that are used to make goods and services

land

all natural resources used to produce goods and services

labor

the effect people devote to tasks for which they are paid

capital

any human-made resource that is used to produce other goods and services

guns or butter

a phrase expressing the idea that a country that decides to produce more military goods ("guns") has fewer resources to produce consumer goods ("butter") and vice versa

opportunity costs

the cost of operating a facility, such as a factory or store

cost-beneft analysis

a decision-making process in which you compare what you will sacrifice and gain by a specific action

production possibilities curve

a graph that shows alternative ways to use an economy's productive resources

efficiency

the use of resources is such a way as to maximize the output of goods and services

Underutilization

the use of fewer resources than an economy is capable of using

economic system

the structure of methods and principles that a society uses to produce and distribute goods and services

safety net

a set of government programs that protect people who face unfavorable economic conditions

market

any arrangement that allows buyers and sellers to exchange things

free market economy

an economic system in which decisions on the three key economic questions are based on voluntary exchange in markets

invisible hand

a term coined by Adam Smith to describe the self-regulating nature of the marketplace

centrally planned economy

an economy in which the government decides how economic resources will be allocated

socialism

a range of economic and political systems based on the belief that wealth should be distributed evenly throughout a society

communism

A political system in which the government owns and controls all resources and means of production and makes all economic decisions

authorization

describing a form of government that limits individual freedoms and requires strict obedience froms its citizens

Laissez-faire

the doctrine that government generally should not intervene in the marketplace

mixed economy

a market-based economic system in which the government is involved to some extent

free enterprise system

an economic system characterized by private or corporate ownership of capital goods

interest group

a private organization that tries to persuade public officials to act according to group members

public disclosure laws

laws requiring companies to provide information about their products or services

Macroeconomics

the study of economic behavior and decision-making in a nation's whole economy

Microeconomics

the study of the economic behavior and decision making of small units, such as households and firms

public good

a shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers

infrastructure

the basic facilities that are necessary for a society to function and grow

externality

an economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume