economics section 1

scarcity

society not having enough rescources to produce things that people should have

economics

the study of how people use limited rescources to satisfy wants and needs

factor of production

rescources used to produces things we would like to have

land

gift of nature give examples. Not created by humans

capital/capitals goods

tools, equipment, machinery, and factories used to produce goods and services

labor

peoples skills, efforts, and abilities NOT ENTREPEUNERS

GDP

gross domestic product. value of everything a country produces in a year

3 BASIC QUESTIONS 1. what to produce

determining what to produce with limited rescources ex. should rescources go to housing or militiary

3 BASIC QUESTIONS 2. how to produce

what society should use to produce goods and services. machinery vs human workers

3 BASIC QUESTIONS 3. to whom to produce

who will receive goods and services produced. ex. if you chose to produce housing should it be catered to wealthy or middle class

TINSTAAFL

there is no such thing as a free lunch

name four factors of productions

land, capital, labor, entrepreneurship

durable goods

a good that lasts more than three years. ex car, house, washing machine

non durable good

lasts less than three years. ex food, toothpaste

consumer

a person who buys goods and services. they buy the cake not cake mixer (capital)

wealth

all the stuff that you own that can be sold or passed down ex. car, jewelry,

utility

the satisfaction someone gets form buying a good or service ex. bad movie

value/paradox of value

how much something costs, some have higher value than others

economic growth

an increase in the amount of goods and services a country produces over time

productivity

the measure of the amount of goods and services produced

division of labor

the method for organizing work forces

specialization

a focus on certain skills

economic independence

relying on each other for economic growth

opportunity cost

cost of the next best alternative

trade off

alternative choices

production possibilities frontier

a diagram representing combinations of goods and services an economy can produve when all its resources are in use

economic model

a simple equation, graph, or figure showing how something works

cost benefit analysis

a way of comparing the cost of an action to its benefits

standard of living

the level of wealth, comfort, and goods an services that people have in a country

free enterprise economy

An economy where people and businesses can freely choose what to produce, sell, and buy, with limited government control.