Economics Chapter 1
needs and wants
how do you make decisions?
two
how many groups of economic decision makes are out there?
shells and beads
in many societies people can use ___ for money
value
in order to avoid the problems of barter, goods and services are assigned ____ that can be expressed as an amount of money, or price
specialize in certain areas
instead of being self-sufficient people tend to..
consumers and producers
is the basis of all economic systems
productivity
is the level of output that results from given a level of input
natural resources
items that are provided by nature (on the earth or in the earth's atmosphere)
capital resources
manufacture materials used to create products
factors of production
resources that can be used to produce goods and services
microeconomics
the study of the choices made by economic actors such as households, companies, and individual markets.
economics
the study of the choices that people make to satisfy their needs and wants
technology
the use of technical knowledge and methods to create new products or make existing products more efficiently
efficiency
the use of the smallest amount of resources to produce the greatest amount output
what, how, and for whom to produce
three basic economic questions
money, barter, and credit
three forms of exchange
tools, equipment, raw materials
to produce everything you needed would require ....
utility
what value is also determined by or usefulness to a person // which can be more difficult to determine than scarcity, because on person may find it useful while others will not
self-sufficiency
when a person can fulfill all of their needs without outside assistence. which is rare because resources are limited
wants
which is more expensive needs or wants?
economists
who are also interested in the environment in which people make decisions?
we do
who makes economic decisions?
specialization
allows each employee to work faster to produce a greater number of alarm clocks
human resources
any human effort exerted during production (physical or intellectual - workers, ministers etc)
money
any item that is readily accepted by people in return for goods and services.
resource
anything that people use to make or obtain what they need or want
money's functions
1) standardized item that is generally traded for goods or services 2) a measure of value that allows both producers and consumers to determine and express worth 3) a store of value that can be saved and used to purchase items at a later date
urgency
A society's needs and wants can never be met completely, thats why the society's economic system must determine the ___ of those needs and wants
credit
allows consumers to use items before completing payment for the merchandise, over a specified amount of time
scarce and payment is needed
a natural resource is considered a factor of production only when it is scarce and some payment is necessary for its use.
entrepreneur
a person who attempts to start a new business or introduce a new product (risking economic failure in return for a possible financial gain)
economist
a person who studies economic choices.
services
actions or activities that are performed for a fee
effectively
after making all th decisions, a society must carry out those decisions and make sure their resources are being used ____ as possible.
wants
are goods and services that people consume beyond what is necessary for survival
division of labor
assigning a small number of tasks to each worker.
difficulties
because of the ___ with barter, it lead to the development of a standardized means of exchage
capital goods
buildings, structures, machinery, and tools used in the production process.
goods and money
capital resources also include capital ___ and ___ to purchase them
goal of entrepreneurship
develop a new mix of the other factors of production, creating something of value
allocate
distribute
survival
economists classify as needs goods and services that needed for...
productivity
economists determine if resources are being used wisely by studying...
economic decisions
economists pay attention to ___, where they observe who makes them and how they are made
macroeconomics
examines the behavior of entire economies (ex. unemployment in the US)
participants
microeconomics can focus on large ___ in the economy - the production at one company is considered a microeconomic topic because only a single economic actor is involved
barter
people exchanged one set of goods for another
consumers
people who decide to buy things
goods
physical objects that can be purchased
exchange
producers and consumers agree to provide one type of item in return for another
most basic problem
scarcity is the ___ ___ ____ of economics, because it forces people to make decisions about how to use resources effectively
capital goods or consumer goods
some products can either be _____ or ____ depending on how they are used
natural, human, capital resources and entrepreneurship
the 4 categories of the factors of production
needs and wants
the answers to the economic questions help a society determine the best distribution of resources to meet its
scarcity
the combination of limited economic resources and unlimited wants results in a condition known as...
entrepreneurship
the combination of organizational abilities and risk taking involved in starting a new business or introducing a new product
consumer goods
the goods and services that people buy
producers
the people who make the things that satisfy the consumers' needs and wants
interdependance
the reliance among economic actors