| A | B |
|---|
| Factors of production | Resources used by businesses to produce goods and services (land, labor, capital, entrepreneurs |
| Land | nautral resources not created by human effort |
| Capital | All buildings, equipment and human skills used to produce goods and services |
| Financial capital | Money used to buy the tools and equipment used in production |
| Labor | People with all their efforts, abilities, and skills |
| Entrepreneur | One who organizes, manages, and assumes the risks of a business or enterprise |
| Economics | The study of human efforts to satisfy what appear to be unlimted and competing wants through the careful use of relatively scare resources |
| Trade-offs | Giving up some of one thing to get some of another thing |
| Opportunity cost | The next best alternative that must be given up when a choice is made |
| Production possibilities frontier | A diagram that represents various combinations of goods and/or services an ecnomy can produce when all productive resources are fully employed |
| Need | A basic requirement for survival |
| Want | A means of expressing a need |
| Free product | Has little to no cost cost because it is so plentiful |
| Economic product | Goods or services that are useful, relatively scare, and transferable to others |
| Good | Tangible commodity |
| Consumer Good | Intended for final use by the individual |
| Capital good | Manufactured good used to produce other goods and services |
| Durable good | Lasts longer than 3 years |
| Nondurable good | Lasts less than 3 years |
| Service | Work that is prefomred for someone |
| Consumer | People whose wants and needs are satisfied by consuming a good or a service |
| Consumption | The process of using up goods and services in order satisfy wants and needs |
| Value | Refers to something that has a worth that can be expressed in monitary terms |
| Paradox of value | Where something that has very little usefulness have a high value and things that are essential have a low value |
| Utility | The capacity to be useful to someone |
| Wealth | The sume of those economics prodocts that are tangible, scare, useful, and transferable |
| Production | The making of goods available for use |
| Productivity | The efficent use of productive resources |
| Specialization | Where the productive imputs do whatever taks they do best |
| Division of labor | When workers preform fewer tasks more frequently |
| Human capital | The health, strength, education, training, and skills which people bring to their jobs |
| Economic interdependence | Where actions in part of the conutry or world have an economic impact on what happens elsewhere |
| Market | A setting where buyers and sellers establish prices for identical or very similar products, and exchange goods and/or services |
| Factor market | Where productive resources are bought and sold |
| Product market | Where producers offer goods and services for sale |
| Free enterprise economy | One in which consumers and privately owend businesses, rather than the government, jointly make the majority of the WHAT, HOW, and FOR WHOM decisions |
