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Scarcity
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The condition in which human wants are forever greater than the available supply of time, goods, and resources
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Resources
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The basic categories of inputs used to produce goods and services
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land, labor, and capital
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What are the three categories resources are divided into?
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factor of production
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What is another name for a resource?
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Land
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A shorthand expression for any natural resource provided by nature. Example: forests, gold, oil
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Labor
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The mental and physical capacity of workers to produce goods and services
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Entrepreneurship
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The creative ability of individuals to seek profits by taking risks and combining resources to produce innovative products
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Capital
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The physical plants, machinary, and equipment used to produce other goods
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Capital goods
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Man made goods that do not directly satisfy human wants
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NO
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Is money capital?
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Economics
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The study of how society chooses to allocate scarce resources to production of goods and services in order to satisfy unlimited wants
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Macroeconomics
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The branch of economics that studies deicison-making for the economy as a whole
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Inflation, Unemployment, and money supply
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Examples of Macroeconomics
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Microeconomics
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The branch of economics that studies decision-making by a single individual, household, firm, or level of goverment
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Positive economics
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An analysis based on statements that are verifiable
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if or then
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What are the two types of positive economics statement?
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Normative Economics
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Attempts to determine what should be. Based on judgements
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good, bad, need, should, and ought to
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What certain words or phrases are used in Normative Economics?
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Opportunity Cost
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The best alternative sacrificed for a chosen alternative
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Margin analysis
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an examanination of the effects or addictions to or subtractions from a current situation
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Production Possibilities Curve
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A curve that shows the maximum combinations of 2 outputs that an economy can produce, given its available resources and technology
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Fixed Resources
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quantities and qualitites of all resource inputs that remain unchanged during a time period
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Fully Employed Resources
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All factors of production full employed and producing the greatest output
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Technology Unchanged
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Holding existing technology fixed creates limits or constraints on the amount and types of goods any economy can produce
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Technology
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A body of knowledge applied to how goods are produced
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Limits an economy to points on or below its production possibilities curve
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What does Scarcity do?
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Law of increasing oppurtunity costs
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The principle that the oppurtunity cost increases as production of one output expands
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Economic Growth
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The ability of an economy to produce greater levels of output, represented by an outward shift of its production possibilities curve
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Investment
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The accumulation of capital, such as factories, machines, and inventories that are used to produce goods and services
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