Basics of Economics: Unit 1 Vocab

wants

Desires that can be satisfied by consuming a good or service

needs

things necessary for survival

scarcity

exists when there are not enough resources to satisfy human wants

economics

the study of how individuals and societies satisfy their unlimited wants with limited resources

goods

objects, such as food, clothing, and furniture, that can be bought

services

work that one person does for another

consumer

a person or organization that uses a product or service

producer

a maker of goods or a provider of services

factors of production

Resources needed to produce goods and services

land

refers to all natural resources used to produce goods and services

labor

all of the human effort used to produce goods and services

capital

all of the resources made and used by people to produce goods and services

entrepreneurship

involves the vision, skills, and risk-taking needed to create and run businesses

opportunity cost

the value of something that is given up to get something else that is wanted

trade-off

the alternative people give up when they make choices

incentive

methods used to encourage people to take certain actions

marginal cost

the additional cost of using one more unit of a product