Economics
The study of choices that people make to satisfy their needs and wants
Economist
A person who studies economic choices
Microeconomics
The study of economics on a much smaller scale
Macroeconomics
The study of economics on a much larger scale
Consumers
People who buy things
Producers
People who satisfy others needs and wants
Goods
Physical objects that can be purchashed
Services
Actions or activities that are performed for a fee
Resource
Anything that people use to make or obtain what they need or want
Factors of production
Resources that can be used to produce goods and services
Natural resources, capital resources, human resources, and entrepreneurship
The 4 factors of production
Natural resources
Items provided by nature that can be used to produce goods and services
Human resources
Any human effort exerted during production
Capital resource
The manufactured materials used to create products
Capital goods
Buildings, structures, machinery, and tools used in the production process
Consumer goods
The finished products people buy
Technology
The use of technical knowledge and methods to create new products or make existing products more efficient
Entrepreneurship
Risk taking involved in starting a new business or introducing a new product
Entrepreneur
Someone who attempts to start a new business or introduce a new product
Scarcity
The combo of limited economic resources and unlimited wants
Allocate
How to decide, or also known as distribute
What, how, and for whom to produce
The three basic economic questions
Productivity
The level of output that results from a given level of input
Efficiency
The use of the smallest amount of resources to produce the greatest amount of output
Division of labor
Assigning a small number of tasks to each worker
Trade-off
When one good is sacrificed for another
Opprotunity cost
The value of the next best alternative that is given up to obtain the preferred item
Inefficient
A point on the inside of the PPC
Efficient
A point on the line of the PPC
Impossiblity
A point on the outside of the PPC
Production Possibilities Curve
What does PPC stand for
Production Possibilities Curve
Shows all of the possible combos of two goods or services that can be produced within a stated time period
Guns and Butter
Usually you compare these two items on a PPC
Butter
To gain more guns you have to give up more ______
Right
A shift in the PPC to the ______ would indicate more improvements in technology
Exchange
Producers and consumers agree to provide one type of item in return for another
Money
Any item that is readily accepted by people in return for goods and services
Credit
Allows customers to use items before completing payment for the merchandise
Value
Can be expressed as an amount of money
Utility
Usefulness to a person
Self-sufficiency
When they can fulfill their needs without outside assistance. (Very rare)
Interdependence
Events of developments in one region of the world or sector of the economy influence events of developments in other regions or sectors