Economics chapter 1

economics

study of how people seek to satisfy their wants and needs by making choices

production possibilities curve

graph that shows alternative ways yo use an economy’s resource

opportunity cost

most desirable alternative given up as a result of a decision

thinking at the margin

when you decide how much more or less you need of something

shortage

a good or service that is not available. Can be temporary or long term

scarcity

limited quantities of resources to meet unlimited wants and needs

guns or butter

the material a country uses to make weapons can no longer be used to help improve the countries other production

underutilization

using fewer resources that an economy is capable of using

cost

to an economist the alternative

entrepreneur

ambitious leader who combines land,labor, and capital to create and market new goods and services

efficient

using resources to maximum the production of goods and services

capital

physical and human

amount of resources

the production of possibilities curves

factors of production

land, labor, and capital

shows different ways to spend your money

purpose of decision making grid

law of increasing cost

shift factors of production from making 1 good service or another