Unit 1: Intro to Economics Vocabulary

Economics

The study of the choices made under the conditions of scarcity

Scarcity

The condition that results because people have limited resources but unlimited wants

Trade off

When you give up one thing to get something else

Opportunity cost

the benefits you miss out on when you choose one thing over the other

Economy

A system used to manage limited resources for the production, distribution, and consumption of goods and services

Goods

Physical items produced in an economy

Services

Activities that are produced in the economy

Society

A collection of people who share a common bond within a living proximity

Needs

Minimal requirements that are necessary to survive

Wants

Things that are desired, but not essential to survive

Labor

Time and effort people contribute to the production process

Capital

Anything used by humans to produce something

Physical Capital

A good that is used to make another goods or services

Human Capital

Skills and knowledge of workers

Entrepreneurship

Willingness of people to organize, operate, and assume the risk involved with business ventures

• Assuming some risk to contribute product or service to society

Land

Anything drawn from nature for use in the production of goods/services

Inputs

things/factors that can be used to make something else, these being land, labor, capital, entrepreneurship