ECON - Vocab 2

goods

___________ or physical objects produced for sale.

Physical articles that have been produced for sale or use. EX: food, clothing, and cars.

services

___________ or activities done for us by others.

Work done by someone else for which a consumer, business, or government is willing to pay.

shortage

A ___________ is a lack of something that is desired, a condition that occurs when there is less of a good or service available than people want at the current price.

Inputs

___________ are the scarce resources that go into the process.

Factors of production

___________ are divided into three basic categories: land, labor, and capital (aka productive resources).

The resources used to produce goods and services. Economists define these resources as land, labor, and capital.

Outputs

___________ are the goods and services produced using these resources.

Production equation

___________ = land + labor + capital = good and services

Entrepreneurship

___________ is the willingness to take the risks involved in starting a business.

Entrepreneurs

___________ assemble the other inputs to create new goods and services.

Land

___________ is the "gifts of nature" that are used to produced to produce goods and services.

Perpetual Resources

___________ are natural resources that are both widely available and in no danger of being used up.

Renewable resources

___________ can be replaced as they are used. EX: Forests, fresh water, and fish.

Nonrenewable resources

___________ are resources that are used are gone forever. Fossil fuels like oil, coal, and natural gas.

Labor

___________ is time and effort people devote to producing goods and services in exchanging for wages.

Human capital

___________ is the knowledge and skill people gain from education, job training, etc.

Correlation

___________ is a relationship between country's human capital and living standard.

Financial capital

___________ is what economists refer to money used.

Physical capital or capital goods

___________ are concrete productive resources.

Capital

___________ consists of the tools, machines, and buildings used in the production of other services and goods.

Productivity

___________ is a measure of the output of an economy per unit of input.

A measure of the efficiency with which goods and services are produced. The quantity produced per person per hour.

Utility

___________ is the satisfaction or pleasure one gains from consuming a product or service or from taking an action.

Opportunity cost

___________ of any action is the value of the next best alternative you could have chosen.

The value of the next best alternative that is given up when making a choice. This is the measure of what you must give up to get what you most want.

Marginal utility

___________ is the extra satisfaction or pleasure you will get from an increase of one additional unit of a good service.

Negative utility

___________ by making you feel sick.

Going on drinking and getting sick.

Law of Diminishing Marginal Utility

___________ ......

As the quantity of a good consumed increases, the marginal utility of each additional unit decreases.

Production possibilities frontier (PPF)

___________ is an economic model, in the form of a line graph.

A simple model of an economy that shows all the combinations of two goods that can be produced with the resources and technology currently available.

Production possibilities curve

___________ sloping line.

Economic efficiency

___________ is the result of using resources in a way that produces the max amount of goods and services