| A | B |
|---|
| need | something like air,food,or shelter that is necessary for survival |
| want | an item that we desire but that is not essential to survival |
| economics | the study of why people make one choice rather than another when buying and selling, spending and saving |
| goods | the things that can be seen or touched |
| services | useful work that cannot be seen or touched |
| scarcity | limited quantities of resources to meet unlimited wants. Not enough to go around. |
| shortage | a situation in which a good or service is unavailable |
| factors of production | land,labor,and capital;the three groups of resources that are used to make all goods and services |
| land | natural resources that are used to make goods and services. Air, water, minerals, trees, plants, etc. |
| labor | the effort that people devote to a task for which they are paid |
| capital | any human-made resource that is used to create other goods and services. The machines, tools, and buildings. |
| physical capital | all human-made goods that are used to produce other goods and services;tools and buildings |
| human capital | the skills and knowledge gained by a worker through education and experience |
| entrepreneur | Assumes the risks and rewards. |
| consumers | the users of goods and services |
| producers | business owners who make the goods |
| economic resources | the things that go into the making of goods and services |
| opportunity cost | choices made by people, business,s and government |
| trade off | What you gave up to make the choice |
| Economists | Professionals concerned with how the goods and services we want are produced and distributed. |
| microeconomics | The effects of economic forces upon individual parts of the economy |
| macroeconomics | The impact of changes on the economy as a whole rather than on an individual part. |
| thinking at the margin | deciding whether to do or use one additional unit of some resource |
| production possibilities graph | a graph that shows alternative ways to use an economy's resources |
| production possibilities frontier | the line on a production possibilities graph that shows the maximum possible output |
| efficiency | using resources in such a way as to maximize the production of goods and services |
| underutilization | using fewer resources than an economy is capable of using |
