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sec. 1-2 quiz vocab: o.c, factors of production, technology, efficiency, production possibilties, etc.
scarcity
the condition of having limited resources and unlimited wants and needs
allocate
the process of distributing a scarce resource
firms
economic term for businesses
economics
a social science that studies how individuals, governments, firms, and nations satisfy their unlimited wants
opportunity cost
the value or benefit of the BEST option that you forgo when making a choice
microeconomics
the study of how individual firms allocate scarce resources
macroeconomics
the study of a nations’ economy
normative economics
economic analysis that is subjective or opinion based
positive economics
economic analysis that is factual
incentives
something that encourages you to take or not take a course of action
producers and consumers
two types of actors in the economy:
products
a good or service that customers buy to satisfy a need or a want
goods
a physical product or item sold to a customer to fulfill their needs or wants
service
an action taken on or provided to a customer to fulfill a need or want
factors of production
the basic building blocks used to produce any goods or services
Natural Resources
resources found on or in the Earth; considered scarce
land
another name for natural resources
coal, oil, wheat
3 examples of land
human resources
any human effort exerted during production; intellectual or physical
labor
another name for human resrouces
legal advice, plumber, truck driver
3 examples of labor
capital resources
manufacturing goods used to produce other products (both goods AND services)
capital
another name for capital resources
ovens, axes, cars
3 examples of capital:
means of production
capital resources is often referred to as the:
investment
the purchase of capital goods
entrepreneurship
combination of organizational abilities and risk taking involved in starting a new business
efficiency
producing the maximum amount of products with the available factors of production
technology
a capital resource or idea that increases efficiency
model
an abstract representation of a part of the economy; usually a graph
production possibilities curve
example of a model:
assumptions
a way economists simplify or reduce the complexity of a situation to make it easier to understand
PPC assumption one
a country/firm/person can only produce two products
PPC assumption two
a country/company has a fixed amount of resources and uses them all efficiently
marginal
analysis of one additional unit
marginal opportunity cost
the opportunity cost of one additional unit
the bowed out shape of the PPC graph
example of increasing marginal opportunity cost
recession
economic decline with high unemployment and inefficiently using land, labor, and capital
insufficient point
any point inside of the PPC model; shows that producers are using their production factors inefficiently
infeasible point
a point on a graph that cannot be produced (maximum efficiency was already reached)
economic growth
when an economy increases its’ productive capacity or is able to produce more goods and services
increase of land, labor, capital, or technological advancement
4 causes of economic growth:
shift
the act of a curve expanding during a period of economic growth
Note 
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