Krueger, Explorations in Economics 1e, Module 1

Physical capital

Any long-lasting good that is used to make other goods or services.

Land

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

Capital

Anything long lasting that is created by humans for use in production.

Inputs

Four types of resources-land, labor, capital, and entrepreneurship-along with anything made with these resources that is then used to make something else, such as cement, steel, lumber, and plastic.

Needs

Minimal requirements of things such as food, water, and shelter that are necessary for survival.

Goods

Physical items produced in an economy, such as jeans, tennis rackets, popcorn, cars, and homes.

Opportunity cost

The value of the next-best alternative given up when that choice is made.

Entrepreneurship

The willingness of people to organize, operate, and assume the risks involved with business ventures.

Wants

Things that are desired but are not essential to life.

Society

A collection of people who share a common bond, such as those living in a city, a country, or even the entire world.

Economy

A system for coordinating the production and distribution of goods and services.

Services

Activities produced in an economy, such as education, entertainment, and health care.

Resources

The basic elements from which all goods and services are produced.

Scarcity

The lack of a sufficient supply to meet all desires.

Human capital

The skills and knowledge of workers.

Economics

The study of choice under conditions of scarcity.

Labor

The time and effort people contribute to the production process.

Tradeoff

When you give up one thing to get something else.