| 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 how people seek to satisfy their needs and wants by making choices |
| goods | physical objects such as clothes or shoes |
| services | actions or activities on person performs for another |
| scarcity | limited quantities of resources to meet unlimited wants |
| shortage | a situation in which a good or service is unavailable |
| factors of production | land, labor, and capital |
| land | natural resources that are used to make goods and services |
| 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 or services |
| physical capital | all human-made goods that are used to produce other goods and services |
| human capital | the skills and knowledge gained by a worker through education and experience |
| entrepreneur | ambitious leader who combines land, labor and capital to create and market new goods or sevices |
| trade-off | an alternative we sacrifice when we make a decision |
| guns or butter | a phrase that refers to the trade-off that nations face when choosing whether to produce more or less military or consumer goods |
| opportunity cost | the most diesirable alternative given up as the result of a decision |
| thinking at the margin | deciding whether to do or use on additional unit of some resource |
