Introduction to Economics Flashcards

Vocabulary flashcards covering fundamental economic concepts, the basic economic problem, scarcity, factors of production, and how scarcity affects different economic agents based on the lecture transcript.

Economics

A social science that studies human behavior as a relationship between ends and scarce means which have alternative uses.

Basic Economic Problem

The situation existing in every economy where finite resources are insufficient to satisfy the unlimited needs and wants of individuals, governments, and firms.

Scarcity

The excess of human wants over what can actually be produced to fulfill those wants due to limited resources.

Needs

Goods or services that are essential for living and that people cannot live without, such as clothes, food, water, and shelter.

Wants

Goods or services that people would like to have even if they can still survive without them.

Factors of Production

Resources used to produce goods and services, which include land, labour, capital, and enterprise.

Consumer Scarcity

The scarcity of income faced by consumers whose limited earnings are not adequate to buy all the goods and services they desire.

Producer Scarcity

The scarcity of resources faced by producers who have limited capital equipment available to produce all the goods and services consumers want.

Worker Scarcity

The scarcity of time and physical capacity faced by workers who wish to maximize earned wages through working multiple jobs or more hours.

Government Scarcity

The constraint of limited tax revenue that restricts a government's desire to maximize social welfare through building schools, hospitals, and dams.