| A | B |
|---|
| TINSTAAFL | There is no such thing as a free lunch |
| The fundamental economic problem | What is scarcity? |
| The condition that arises because society does not have enough resources to produce al the things people would like to have. | scarcity |
| The factors of production | Land, capital, labor and entrepreneurship |
| all the gifts of nature, or natural resources not created by human effort. | land |
| deserts, fertile fields, forests, mineral deposits, cattle , whales, sunshine | What is land? |
| the tools, equipment, and factories used in the production of goods and services. | What is capital |
| the money used to buy the tools and equipment used in production | financial capital |
| bulldozers, cash registers, bakery ovens, | capital goods |
| People with all their efforts, abilities, and skills. | What is labor? |
| population, growth, famine, war, and disease | what factors impact the quantity and quality of labor? |
| what to produce, How to Produce, & for whom to produce. | The three basic questions of economics. |
| a risk taker in search of a profit. | What is an entrepreneur? |
| Should a society devote most of its resources to producing military equipment or to food and clothing | the question of "What to produce.' |
| Should a factory owner use an assembly-line methods or more workers | What is "How to Produce?" |
| A choice must be made as to who will receive the existing supply. | For whom to produce. |
| Description, analysis, explanation, prediction | The meaning and scope of economics. |
| alternative choices, when spending their income or time. | trade-offs. |
| The cost of the next best best alternative use of the money, time or resources when one choice is made rather than another. | Opportunity cost |
| A popular model economists use to illustrate the concept of opportunity cost | Production Possibility Frontier |
| A Scottish economist and philospher | Adam Smith |
| Book Adam Smith wrote and is the basis for the American economic system | Wealth of Nations |
| competition, together with the free market system to guide resources to their most productive use. | the Invisible Hand |
| A doctrine which states their should be no government intervention in economic affairs | Laissez-faire |
| A basic requirement for survival | A need |
| A means of expressing a need. | A want |
| sunshine, air, etc. that are plentiful | free products. |
| goods and services that are useful, relatively scarce, and transferable to others | economic products |
| A tangible commodity like a book, car, or TV | A good |
| a good intended for final use by an individual | consumer good |
| A manufactured used to produce other goods and services | Capital good |
| any good that lasts three years or more when used on a regular basis. | Durable good |
| An item that lasts for less than three years when it is used on a regular basis | nondurable good. |
| work that is performed for someone | Service |
| People who use goods and services to satisfy wants and needs | Consumer |
| The process of using up goods and services in order to satisfy wants and needs. | Consumption |
| The use of a good or service to impress others | conspicuous consumption |
| water is free, diamonds are expensive | Paradox of value |
| The capacity to be useful to someone | Utility |
| The sum of those economic products that are tangible, scarce, useful, and transferable from one person to another. | Wealth |
| The process of creating goods and services | Production |
| The efficient use of productive resources | Productivity |
| Productive inputs do whatever task they are able to do best. | Specialization |
| When workers perform fewer tasks more frequently. | Division of labor |
| The sum of skills, abilities, health, and motivation of people. | Human capital |
| The actions in one part of the country or the world have and economic impact on what happens elsewhere | economic interdependence. |
| A location or other mechanism that allows buyers and sellers to do business | market |
| The markets where productive resources are bought and sold. | factor market |
| markets where producers offer goods and services for sale. | product market |
| the quality of life based on the possession of necessities and luxuries tha make life easier. | Standard of living. |
| One in which consumers and privately owned businesses jointly make the majority of the WHAt, HOW, and FOR WHOM decisions. | Free enterprise economy. |
