| A | B |
|---|
| captial | Any human-made resource that is used to create other goods or services. |
| cost | To an economist, cost is an alternative that is given up as the result of a decision. |
| economics | The study of how people satisfy their needs and wants by making choices. (Textbook definition) A social science concerned with the way society chooses to employ its limited resources, which have alternative uses, to produce goods and services for present and future consumption. (Class definition) |
| efficiency | Using resources in such a way as to maximize the production of goods and services. |
| entrepreneur | Leader who combines land, labor and capital to create and market new goods or services. |
| factors of production | Land, labor and captial; the three groups of resources that are used to make all goods and services. |
| goods | Physical objects such as clothes or shoes. |
| guns or butter | A phrase that refers to the trade-off that nations face when choosing whether to prodece more or less military or consumer goods. |
| human capital | The skills and knowledge gained by workers through education and experience. |
| labor | The effort that people devote to a task for which they are paid. |
| land | Natural resources that are used to make goods and services. |
| law of increasing costs | As we shift factors of production from making one good or service to another, the cost of producing the second item increases. |
| need | Something like air, food or shelter that is necessary for survival. |
| opportunity costs | The most desireable alternative given up as a result of a decision. |
| physical capital | All human-made goods that are used to produce other goods and sercies; tools and buildings |
| production possibilities curve (PPC) | A curve that shows alternative ways to use an economy's resources. |
| scarcity | Limited quantities of resources to meet unlimited wants. |
| services | Actions or activities one person performs for another. |
| shortage | A situation in which a good or service is unavailable, or a situation in which the quantity supplied, also known as excess demand. |
| thinking at the margin | Deciding whether to do or use one additional unit of some resource. |
| trade-off | An alternative we sacrifice when we make a decision |
| underutilization | Using fewer resources than an economy is capable of using. |
| want | An item that we desire but that is not essential to survival. |
| capitalism | An economic system in which a county's trade and industry are controlled by private business, rather than the government. |
| democracy | A political system where the people rule, either directly or though elected representatives. |
| American dream | The traditional social values of the United States, such as equality, prosperity and democracy. |
| Meritocracy | The holding of power by people selected on the basis of their ability. |
| consumer | A person that uses products or services, especially for personal needs. |
