| A | B |
|---|
| scarcity | the condition that results from society not having enough resources to produce all the things people would like to have. |
| needs | a basic requirement for survival and includes food, clothing, and shelter. |
| wants | a way of expressing a need |
| capital | the tools, equipment, machinary, and factories used in the production of godds and services. |
| land | refers to the natural resources not created by humans. |
| entrepreneur | a risk-taker in search of profits who does something new with existing resources |
| production | the process of creating goods and services. |
| GDP | Gross Domestic Product-the dollar value of all final goods and services, and structures produced with in a 12 month period |
| service | work that is performed for someone |
| value | refers to the worth that can be expressed in dollars and cents |
| utility | the capacity to be useful and provide satisfaction |
| capital goods | manufactured goods are used to produceother goods and services |
| market | a location or other mechanism that allows buyers and sellers to exchange a certain economic product |
| paradox of value | the situation where some necessities, such as water, have little monetary value, whereas some necessities, such as diamonds, have a much higher value. |
| factor market | the markets where productive resources are bought and sold |
| product market | markets where producers sell their goods and services to consumers |
| division of labor | takes place when work is arranged so that individual workers do fewer tasks than before |
| economic interdependence | this means that we rely on others, and others rely |
| trade offs | alternative choices, whenever they make an economic decision |
| opportunity cost | the cost of the next best alternative, use of money, time, or resources when one choice is made rather than another |
| free enterprise economy | one in which consumers and privately owned businesses, rather than the government, make the majority of the WHAT, HOW, and FOR WHOM decisions |
