Economics Chapter 1- What is Economics?
entrepreneurship
Ability of taking a risk to develop new products and start new businesses in order to make profits
services
Actions that can satisfy wants or needs
technology
Advance in knowledge leading to new and improved goods and services
hypothesis
An assumption involving or more variables that must be tested for validity
macroeconomics
Economic theory dealing with the economy as a whole and decision making by large units such as the government
microeconomics
Economic theory that deals with behavior and decision making by small units such as individuals and firms
production possibilities curve
Graph showing the maximum combinations of goods and services that can be produced from a fixed amount of resources in a given period of time
labor
Human effort directed toward producing goods and services
factors of production
Land, labor, and capital; resources that are used to make all goods and services.
land
Natural resources, surface land, and water
capital
Previously manufactured goods used to make other goods and services
goods
Tangible objects that can satisfy people's wants or needs
productivity
The amount of goods and services that results from a given level of inputs
economy
The production and distribution of goods and services in a society
economic model
Theory or simplified representation that helps explain and predict economic behavior in the real world
opportunity cost
Value of the next best alternative given up for the alternative that was chosen
scarcity
limited quantities of resources to meet unlimited wants
trade-off
sacrificing one good or service to purchase or produce another
economics
the study of how individuals and societies make choices about ways to use scarce resources to fulfill their wants