What is Economics Test

need

something essential for survival

want

something that people desire but that is not necessary for survival

goods

the physical objects that someone produces

services

the actions or activities that one person performs for another

scarcity

the principle that limited amounts of goods and services are available to meet unlimited wants

economics

the study of how people seek to satisfy their needs and wants by making choices with scarce resources

shortage

a situation in which consumers want more of a good or service than producers are willing or able to make available at current prices

entrepreneur

a person who decides how to combine resources to create goods and services

factors of production

the resources that are used to make goods and services

land

all natural resources used to produce goods and services

labor

the effort people devote to tasks for which they are paid

capital

any human-made resource that is used to produce other goods and services

physical capital

the human-made objects used to create other goods and services

human capital

the knowledge and skills a worker gains through education and experience

trade-off

the alternatives that we give up when we choose one course of action over another. Giving up one thing in order to gain another thing that you also desire

"guns or butter"

a phrase expressing the idea that a country that decides to produce more military goods ("guns") has fewer resources to produce consumer goods ("butter") and vice versa

opportunity cost

the most desirable alternative given up as the result of a decision

Entrepreneurs

Ambitious leaders willing to take a risk and decide how best to combine the factors of production: land, labor, and capital.

Henry Fords Quote

Reduced average production time of Model T from 12 hours down to 93 minutes, Lowered selling price by 30% from $825 down to $575, Ford raised employee wages by 43% and reduced the work day from 9 hours to 8 hours, Improved worker morale and loyalty, Increased his customer base, By 1924 he sold 10 million Model T cars, Assembly Line process allowed Ford to mass produce high quality cars at affordable prices