Economics: Section 1-2

the condition of having limited resources and unlimited wants and needs

the process of distributing a scarce resource

economic term for businesses

a social science that studies how individuals, governments, firms, and nations satisfy their unlimited wants

the value or benefit of the BEST option that you forgo when making a choice

the study of how individual firms allocate scarce resources

the study of a nations’ economy

economic analysis that is subjective or opinion based

economic analysis that is factual

something that encourages you to take or not take a course of action

two types of actors in the economy:

a good or service that customers buy to satisfy a need or a want

a physical product or item sold to a customer to fulfill their needs or wants

an action taken on or provided to a customer to fulfill a need or want

the basic building blocks used to produce any goods or services

resources found on or in the Earth; considered scarce

another name for natural resources

3 examples of land

any human effort exerted during production; intellectual or physical

another name for human resrouces

3 examples of labor

manufacturing goods used to produce other products (both goods AND services)

another name for capital resources

3 examples of capital:

capital resources is often referred to as the:

the purchase of capital goods

combination of organizational abilities and risk taking involved in starting a new business

producing the maximum amount of products with the available factors of production

a capital resource or idea that increases efficiency

an abstract representation of a part of the economy; usually a graph

example of a model:

a way economists simplify or reduce the complexity of a situation to make it easier to understand

a country/firm/person can only produce two products

a country/company has a fixed amount of resources and uses them all efficiently

analysis of one additional unit

the opportunity cost of one additional unit

example of increasing marginal opportunity cost

economic decline with high unemployment and inefficiently using land, labor, and capital

any point inside of the PPC model; shows that producers are using their production factors inefficiently

a point on a graph that cannot be produced (maximum efficiency was already reached)

when an economy increases its’ productive capacity or is able to produce more goods and services

4 causes of economic growth:

the act of a curve expanding during a period of economic growth