Economics- Chapter 1 and 2

Exists when there are not enough resources to satisfy human wants

the study of how individuals and societies satisfy their unlimited wants with limited resources

What are the 3 questions that scarcity leads to?

What are the 4 factors of production?

All of the resources made and used by people to produce goods and services

involves the vision, skills, and risk-taking needed to create and run businesses

Methods used to encourage people to take certain actions

the benefit or satisfaction recieved from using a good or service

To ___________________ means to make decisions according to the best combination of costs and benefits

the alternative people give up when they make choices

the value of something that is given up to get something else that is wanted

an approach that weighs the benefits of an action against its costs

the additional cost of using one more unit of a product

the additional satisfaction from using one more unit of a product

simplified representation of economic forces

a graph used by economists to show the impact of scarcity of an economy

invloves producing the maximum amount of goods and services possible

means producing fewer goods and services than possible

states that as production switches from one product to another, increasing amounts of resources are needed to increase the production of the second prodcut

information in numerical form

the study of individuals, families, and businesses in an economy

the study of the economy as a whole and is concerned with large-scale economic activity

studies economic behavior as it is

involves judgements of what economic behavior ought to be

an economic system in which people produce and distribute goods according to customs handed down from generation to generation

an economic system in which the government makes all economic decisions

an economic system in which individual choice and voluntary exchange direct economic decisions

a system in whihc central government officials make all economic decisions

an economic system in which the government owns some or all of the factors of production

an economic system in which the government owns all the factors of production and there is little or no political freedom

systems require absolute obedience to those in power

the rights of individuals and groups to own businesses and resources

an place where people buy and sell goods and services

the principle that the government should not interfere in the market place

an economic system that is based on private ownership of the factors of production

is a trade in which both traders believe that what they are getting is worth more than what they are giving up

the idea that consumers have unlimited control over what is produced because they are free to buy what they want and to reject what they don't want

a situation in which people concentrate their efforts in the activities that they do best

the market where goods and services are bought and sold

the market for the factors of production

an economy that has elements of traditional command and market systems

means to changed from private ownership to government or public ownership

refers to all the economic interactions that cross international boundaries