Chpt 1 Econ Vocab

  1. Need
    Something like air, food, or shelter that is necessary for survival.
  2. Want
    An item that we desire but that is not essential to survival.
  3. Economics
    The study of how people seek to satisfy their needs and wants by making choices.
  4. Goods
    Physical objects such as clothes or shoes.
  5. Services
    Actions or activities that one person performs for another.
  6. Scarcity
    Limited quantities of resources to meet unlimited wants.
  7. Shortage
    A situation in which a good or service is unavailable.
  8. Factors of Production
    Land, labor, and capital; the three groups of resources that are used to make all goods and services.
  9. Land
    Natural resources that are used to make goods and services.
  10. Labor
    The effort that people devote to a task for which they are paid.
  11. Capital
    Any human resource that is used to create other goods and services.
  12. Physical Capital
    All human-made goods that are used to produce other goods and services; tools and buildings.
  13. Human Capital
    The skills and knowledge gained by a worker through education and experience.
  14. Entrepreneur
    Ambitious leader who combines land, labor, and capital to create and market new goods and services.
  15. trade-off
    An alternative that we sacrifice when we make a decision.
  16. Guns or Butter
    A phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods.
  17. Opportunity Cost
    The most desirable alternative given up as the result of a decision.
  18. Thinking at the Margin
    Deciding whether to do or use one additional unit of some resource.
  19. Production Possibilities Curve
    A graph that shows alternative ways to use an economy's resources.
  20. Production Possibilities Frontier
    The line on a production possibilities graph that shows the maximum possible output.
  21. Efficiency
    Using resources in such a way as to maximize the production of goods and services.
  22. Underutilization
    Using fewer resources than an economy is capable of using.
  23. Cost
    To an economist, the alternative that is given up because of a decision.
  24. Law of Increasing Costs
    Law that states that as we shift factors of production from making one good or service to another, the cost of producing the second item increases.
Card Set
Chpt 1 Econ Vocab
Words and definitions for chapter 1 Econ Vocab Quiz.