Economics chapter 1: the fundamental economic problem
Utility
A good's or service's capacity to provide satisfaction which varies its the needs and wants for each person.
Productivity
A measure of the amount of output produced by the amount of inputs within a certain time. It increases its efficient use of scarce resources.
Macroeconomics
Examines the behavior of entire economies
Production possibilities frontier diagram
Illustrates the conquer of opportunity cost. It shows the combinations of goods and/or services that can be produced when all productive resources are used.
Specialization&division of labor
Improve productivity because they lead to more proficiency (and greater economic interdependence).
Goods
Items that are economically useful or satisfy an economic want. They are tangible and can be classified as consumer/capital and durable/no durable.
Interdependence
Reliance on others and their reliance on us to provide goods and services. Economy's productivity may be affected by this.
Factors of production
Resources necessary to produce what people want or need
Entrepreneurs
Risk-takers who combine the land, labor, and capital into new products
What must we produce?
Society must choose based on its need
For whom should we produce it?
Society must choose based on its population and other available markets
How should we produce it?
Society must choose based on its resources
Wealth
The accumulation of goods that are tangible, scarce, useful, and transferable to another person. Wealth does not include services.
Trade-offs
The alternative choices people face in making an economic decision. A decision-making grid lists the advantages and disadvantages of each choices.
Scarcity
The condition here unlimited human wants meet limited resources
Opportunity cost
The cost of the next best alternative among a person's choices. It's the money, tie, or resources a person gives up, or sacrifices, to make his final choice.
Capital
The means by which something is produced such as money, tools, equipment, machinery, and factories. (Enable to produce)
Producers
The people who make things that satisfy consumers needs and wants
Consumers
The people who purchase things;they use goods and services to satisfy wants and needs
Production
The result of land, capital, labor, and entrepreneurs, creating goods and services
Land
The society's limited natural resources-landforms, minerals, vegetable, animal life, and climate
Economics
The study of how people satisfy wants its scarce resources
Microeconomic
The study of the choices made by economic factors such as households, companies, and individuals
Labor
The workers who apply their efforts, abilities, and skills to production
Factor market
Where people earn their incomes
Product maret
Where people use their income to buy products.
Services
Work performed for someone and are intangible
Value
Worth expressed in dollars and cents. Scarcity by itself is not enough to create value. For something to have value, it must also have utility
