Economics Packet 1
Entrepreneurship (FOP)
The human resources that assume the risk of organizing other resources to produce goods and services
Labor (FOP)
The quantity and quality of human effort directed toward producing goods and services
Economics
The study of the efficient use of limited resources to achieve maximum satisfaction of human wants and needs
Economic System
The way a society chooses to allocate its resources and distribute its goods and services
Economic Equity
Ensure that people receive a fair portion of the economy's output
Normal profit/loss
Entrepreneurship
Capital (FOP)
Factories, Machines, and tools made by people and used to produce goods and services
Consumer good
If a producer's output is purchased by consumers for its final use
Consumer capital
If a producer's output is used to make other goods
Wage
Labor
Rent
Land
Land (FOP)
Natural Resources which are present without human intervention
Goods
Objects that satisfy wants and needs and are tangible
Producers
People who make goods and provide services
Consumers
People whose wants are satisfied by using goods and services
Economic Growth
Producing more and better goods and services over time which will lead to a higher standard of living
Economic Security
Provide for those who are unable to earn minimum levels of income
Full Employment
Provide jobs for all citizens who are willing to work
Scarcity
Society has unlimited wants but limited productive resources
Macroeconomics
Study of entire economies, their performance, and policies to promote stability and growth in the entire economy.
Microeconomics
Study of individual consumers, producers, markets, or industries
Opportunity Cost
The highest valued alternative that must be given up when another option is chosen
Economic Model includes
1) Parts of the economies that are related, variables 2) Assumptions about those relationships 3) Observations about the interaction of those variables 4) The implications of the relationships
3 Fundamental Economic Questions
1) What to produce? 2) How to produce? 3) For whom to produce?
Utility
Ability of a good to satisfy a want
Economic efficiency
Achieving the greatest output with the available inputs (resources)
Services
Activities that satisfy wants and needs and are intangible
Price Level Stability
Avoiding inflation or deflation
Interest
Capital
Economic Freedom
Consumers pursue freedom of choice and producers meet consumer's needs