Economics: Section 1-2

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scarcity

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Economics

sec. 1-2 quiz vocab: o.c, factors of production, technology, efficiency, production possibilties, etc.

43 Terms

1

scarcity

the condition of having limited resources and unlimited wants and needs

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2

allocate

the process of distributing a scarce resource

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3

firms

economic term for businesses

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4

economics

a social science that studies how individuals, governments, firms, and nations satisfy their unlimited wants

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5

opportunity cost

the value or benefit of the BEST option that you forgo when making a choice

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6

microeconomics

the study of how individual firms allocate scarce resources

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7

macroeconomics

the study of a nations’ economy

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8

normative economics

economic analysis that is subjective or opinion based

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9

positive economics

economic analysis that is factual

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10

incentives

something that encourages you to take or not take a course of action

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11

producers and consumers

two types of actors in the economy:

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12

products

a good or service that customers buy to satisfy a need or a want

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13

goods

a physical product or item sold to a customer to fulfill their needs or wants

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14

service

an action taken on or provided to a customer to fulfill a need or want

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15

factors of production

the basic building blocks used to produce any goods or services

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16

Natural Resources

resources found on or in the Earth; considered scarce

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17

land

another name for natural resources

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18

coal, oil, wheat

3 examples of land

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19

human resources

any human effort exerted during production; intellectual or physical

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20

labor

another name for human resrouces

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21

legal advice, plumber, truck driver

3 examples of labor

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22

capital resources

manufacturing goods used to produce other products (both goods AND services)

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23

capital

another name for capital resources

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24

ovens, axes, cars

3 examples of capital:

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25

means of production

capital resources is often referred to as the:

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26

investment

the purchase of capital goods

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27

entrepreneurship

combination of organizational abilities and risk taking involved in starting a new business

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28

efficiency

producing the maximum amount of products with the available factors of production

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29

technology

a capital resource or idea that increases efficiency

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30

model

an abstract representation of a part of the economy; usually a graph

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31

production possibilities curve

example of a model:

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32

assumptions

a way economists simplify or reduce the complexity of a situation to make it easier to understand

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33

PPC assumption one

a country/firm/person can only produce two products

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34

PPC assumption two

a country/company has a fixed amount of resources and uses them all efficiently

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35

marginal

analysis of one additional unit

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36

marginal opportunity cost

the opportunity cost of one additional unit

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37

the bowed out shape of the PPC graph

example of increasing marginal opportunity cost

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38

recession

economic decline with high unemployment and inefficiently using land, labor, and capital

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39

insufficient point

any point inside of the PPC model; shows that producers are using their production factors inefficiently

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40

infeasible point

a point on a graph that cannot be produced (maximum efficiency was already reached)

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41

economic growth

when an economy increases its’ productive capacity or is able to produce more goods and services

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42

increase of land, labor, capital, or technological advancement

4 causes of economic growth:

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43

shift

the act of a curve expanding during a period of economic growth

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