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Cards In This Set
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Factors of production
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The resources used to produce goods and services; also known as production inputs or resources
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Natural resources
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Resources provided by nature and used to produce goods and services
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Labor
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Human effort, including both physical and mental effort, used to produce goods and services
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Scarcity
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The resources we use to produce goods and services are limited because the earth is finite; scarcity implies limited output
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Economics
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The study of how to allocate scarce resources efficiently to produce goods and services wanted by society
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Physical capital
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The stock of equipment, machines, structures, and infrastructure that is used to produce goods and services
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Human capital
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The knowledge and skills acquired by a worker through education and experience and used to produce goods and services
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Entrepreneurship
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The effort used to coordinate the factors of production - natural resources, labor, physical capital, and human capital - to produce and sell products
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Positive analysis
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Answers the questions "What is?" or "What will be?"
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Normative analysis
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Answers the question "What ought to be?"
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Economic model
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A simplified representation of an economic environment, often employing a graph
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Variable
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A measure of something that can take on different values
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ceteris paribus
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The Latin expression meaning that other variables are held fixed
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Marginal change
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A small, one-unit change in value
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Macroeconomics
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The study of the nation's economy as a whole; focuses on the issues of inflation, unemployment, and economic growth
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