Basic Economic Concepts - Lesson I (Part 1)

Vocabulary flashcards covering basic economic concepts from the lecture notes.

Economics

A social science that studies the optimum allocation, over time, of scarce resources among alternative uses to satisfy unlimited human wants and desires.

Scarcity

The condition arising from unlimited wants and limited resources; the basic and biggest economic problem.

Economic Growth

Occurs when a nation's total output increases over time.

Division of Labor

Dividing work into specialized tasks so workers perform fewer duties, increasing efficiency.

Specialization

When workers focus on tasks they perform more efficiently.

Land

Natural resources used in production.

Labor

Human effort or workers involved in production.

Capital

Money, machines, tools, and equipment used to produce goods and services.

Entrepreneurship

The initiative and risk-taking ability to organize land, labor, and capital to create goods and services.

Goods

Items that satisfy wants; can be consumer goods or capital goods.

Consumer Goods

Goods with final use by individuals.

Capital Goods

Goods used to produce other goods and services.

Services

Work performed by someone for others; examples include home repair, concerts, haircuts.

Utility

Satisfaction or usefulness obtained from consuming goods and services.

Value

Worth in dollars and cents.

Paradox of Value

The idea that essential items may have very low value while unneeded items may have high value.

Wealth

Accumulation of resources and things that are tangible in the economy.

Economic Products

Goods and services that are useful, scarce, and transferable. It also command a price because they are scarce.