Chapter 1 What is Economics (Section 1)

Shortage

A situation in which a good or service is unavailable.

Services

Actions or activites that one person performs for another.

Physical Capital

All human-made goods that are used to produce other goods and services; tools and buildings.

Entrepreneur

Ambitious leader who combines land, labor, and capital to create and market new goods and services.

Want

An item that we desire but that is not essential to survival.

Capital

Any human-made resource that is used to create other goods and services.

Factors of Production

Land labor, capital; the three groups of resources that are used to make all goods and services.

Scarcity

Limited quantities of resources to meet unlimited wants.

Land

Natural resources that are used to make goods and services.

Goods

Physical objects such as cloths or shoes.

Need

Something like air, food, or shelter that is necessary for survival.

Labor

The effort that people devote to a task for which they are paid.

Human Capital

The skills and knowledge gained by worker through education and experience.

Economics

The study of how people seek to satisfy thier needs and wants by making choices.