chapter 1 : the foundations of economics

scarcity

the idea that all resources are insufficient to satisfy unlimited human needs and wants

choice

choices must be bade about what will be produced and what will be sacrificed

efficiency

making the best possible use of scarce resources to avoid resource waste

equity

the idea of being fair

sustainability

the long term maintenance of any particular activity or policy

resources

the inputs used to produce foods and services demanded

scarcity

the situation in which available resources are finite whereas the wants are infinite

factors of production

land, labour, capital, entrepreneurship

capital

resources that can produce a future stream of benefits

what are the different types of capital

physical, human, natural and financial

opportunity cost

how much of a good or service sacrified in order to have another good or service

human capital

skills, abilities and knowledge acquired by people

free good

any good that is not scarce

economic good

any good that is scarce

production possibilities curve

represents all combinations of the maximum amounts of two goods that can be produced by an economy

circular flow of income

illustrâtes some economic concepts and relationships that help to understand the overall economy

equality

being the same