| A | B |
|---|
| Economics | Social Science concerned with how resources are used to satisfy people's wants |
| scarcity | limited resources for production relative to demand for goods and services |
| Masow's Hierarchy of Needs | states that human needs must be satisfied in steps, starting with basic needs |
| pig principal | people want more; people's wants are unlimited |
| 3 basic economic questions | What to produce? How to produce? For whom to produce? |
| factors of production | land, labor, capital |
| entrepreneur | business innovator who will take risks to create new goods and services |
| P.A.C.E.D. model | Approach for decision making |
| P. in PACED model | identify the problem |
| A. in PACED model | list the alternatives |
| C. in PACED model | establish the criteria |
| E. in PACED model | evaluate the alternatives |
| D. in PACED model | decide on a course of action or solution |
| economic view of wants and needs | there is no difference between wants and needs |
| land | all natural resources, including fields, forests, mineral deposits |
| productive resources are scarce, therefore | all goods and services are scarce |
| labor | mental and physical effort that people devote to a task for which they are paid |
| capital | any human-made good that is used to create other goods and services; factories, tools, equipment |
| opportunity cost | highest valued alternative that you didn't pick when you made a choice |
| production possibilty frontiers | model used to describe the maximum output and production choices between two good/services |
