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Economics
A social science that deals with the allocation of scarce resources to satisfy man’s unlimited needs and wants
Scarcity
insufficiency of resources to meet all the needs and wants of a population
Relative Scarcity
a good is scarce compared to its demand
Absolute Scarcity
supply is limited
Trade Off
choosing one thing over the other possibilities
Opportunity Cost
refers to the value of the best forgone alternative
Opportunity Cost
Value of things that could have gained from alternatives that were not selected
Economic Resources
“factors of production“
Economic Resources
Resources used to produce goods and services
3 Economic Resources
Land
Labor
Capital
Land
Soil and natural resources
Rent
payment for land owners
Labor
physical and human effort exerted in production
Wage
income received in labor
Capital
man made resources in production of goods
Interest
income in capital
