Chapter 1 Lesson 1 Econonmics

scarcity

the condition that results from society not having enough resources to produce all the things people would like to have.

econonmics

is the study of how people try to satisfy seemingly unlimited and competing needs and wants through the careful use of relatively scarce resources

need

a basic requirement for survival such as food, clothing, shelter

want

simply something we would like to have but isn’t needed to survive.

good

a useful tangible item that other people can use to satisfy a need or a want

durable good

one that lasts 3+ years

nondurable good

one that lasts less than three years

consumer good

a good intended for final use by consumers or individuals

capital good

tool or good such as machinery or equipment that is used by businesses to produce other products

service

work that is performed for someone

value

a term that refers to a worth that can be expressed in dollars and cents.

paradox of value

describes the apparent contradiction where essential goods like water are often cheap while non-essential goods like diamonds are expensive. Theorized by Adam Smith

utility

the capcity to be useful and provide satisfaction

wealth

the accumulation of products that are tangible, scarce, have utility, and are transferable

gross domestic product (GDP)

The monetary value of all final goods, services, and structures produced within a country’s borders in a 12-mont period.