Chapter 1: What Is Economics?

Scarcity forces us to make choices. We can't have everything we want, so we are forced to choose what we want most.

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Cards In This Set

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Scarcity
The fundamental economic problem facing all societies.
Economics
The study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scare resources.
Need
A basic requirement for survival and including food, clothing, and shelter.
Want
A way of expressing a need.
Factors of Production
Productive resources that make up the four categories of land, capital labor, and entrepreneurship.
Land
Natural resources or "Gifts of Nature" not created by human effort; one of four factors of production.
Capital
Tools, equipment, and factories used in the production of goods and services.
Labor
People with their efforts, abilities, and skills.
Entrepreneur
Risk-taker in ssearch of profits who does something new with existing resources.
Production
The process of creating goods and services.
Gross Domestic Product (GDP)
The dollar value of all final goods and services, and structure produced within a country's borders in a 12-month period.
Products
Goods and services that are useful relatively scare, and transferrable to others.
Consumer Good
Intended for final use by individuals.
Good
An item that is economically useful or satisfies an economic want.
Capital Goods
Manufactured goods that are used to produce other goods and services.