Module 1.1 Scarcity and Choice

Economics

The study of scarcity and choice

Trade-off

When you give up something to get something else.

Resource/ Factor of Production

Anything that can be used to produce something else.

Land

Refers to all resources that come from nature, such as timber, wind, and petroleum.

Labor

The effort of workers

Capital

Manufactured goods used to make other goods and services

Entrepreneurship

Describes the efforts of entrepreneurs in organizing resources for production, taking risks to create new enterprises, and innovating to develop new products and production processes.

Scarce Resource

Not available in sufficient quantities to satisfy all the various ways a society wants to use it.

Opportunity Cost

The value of the next best alternative that you must give up in order to get the item

Microeconomics

The study of how individuals, households, and firms make decisions and how those decisions interact.

Household

A person or group of people who share their income.

Firm

Any organization that produces goods or services for sale.

Macroeconomics

Concerned with the overall ups and downs of the economy.