Econ 202 Test 1

A situation in which unlimited wants exceed the limited resources available to fulfill those wants

The study of the choices people make to attain their goals, given their scarce resources Economics is about positive analysis, which measures the costs and benefits of different courses of action.

A simplified version of reality used to analyze real-world economic situations.

Households, firms, interaction with markets and gov influence economy as a whole inflation unemployment and economic growth

The idea that because of scarcity, producing more of one good or service means producing less of another good or service.

The value of the next-best alternative use of a resource

What goods and services be producedHow will the goods and services be producedWho will receive the goods and services produced

A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade

People are rationalpeople respond to economic incentivesOptimal decisions are made at the margin (most decisions in life involve doing a little more or a little less)

A market for goods such as computers or services (medical treatment)

A market for the factors of production such as labor capital natural resources and entrepreneurial ability

The inputs used to make goods and services

Labor (all types of work), Capital (tools used to produce other goods computers machines), Natural resources, Entrepreneurial (the ability to bring together other factors of production to produce and sell goods and services)

A market with few government restrictions on how a good or service can be produced or sold or on how a factor of production can be employed.

Yea!