| A | B |
|---|
| Economics | The study of the problem of scarcity |
| Scarcity | The result of unlimited wants and limited resources. |
| Trade-Offs | Alternative choices which result from scarcity |
| Opportunity Costs | What you choose to trade-off due to scarcity |
| Factors of Production | Land, labor capital, & entrepreneurship |
| Land | Natural resources |
| Labor | People |
| Capital | Tools of production |
| Entrepreneur | Risk Takers |
| The Three Basic Economic Questions | What, how, & for whom? |
| Production Possibilities Frontier | It depicts all the combinations of goods & services that can be produced when resources are fully employed |
| Needs | A basic requirement for survival |
| Wants | A way of expressing a need |
| Goods | A tangible commodity |
| Services | Work performed for somebody |
| Consumers | People who use goods & services |
| Utility | The ability to provide satisfaction |
| Productivity | The degree to which resources are used efficiently |
| Specialization | Division of Labor |
| Division of Labor | Specialization |
| Human Capital | Skills, ability, health, & motivation of people |
| Financial Capital | Money |
| Traditional Economy | Resources are allocated based on ritual habit or custom |
| Command Economy | Resources are allocated by a central authority |
| Market Economy | Resources are allocated based on the individual decisions of producers and consumers |
| Capitalism | An economic system in which private citizens own the productive resources |
| Free Enterprise | An economic system which operates with a minimum of government interference |
| Private Property | The concept that people have the right to control their possessions as they wish |
| Absolute Advantage | The ability to produce more of a given good or service than another country |
| Comparative Advantage | The ability to produce a given good or service at a lower opportunity cost than another country |
