Economics - Unit 1 Part 1 Vocabulary REVIEW

basic condition that exists when unlimited wants exceed limited productive resources

tools, machines, and structures used over and over again in the production of goods and services

models that economists use to explain how decision-makers in an economy are likely to view certain economic principles

type of arrangement which worker specializes in particular task/job-workers get better at their tasks with repetition

primary driver of entrepreneurship - desire to make a profit (money)

development of new products, processes, organizations, management practices, strategies- key motivation of entrepreneurs

three basic economic questions are answered by a central authority or government

additional positive value one receives from undertaking one more unit of an action

people involved in the production of goods and services

The gifts of nature we use to produce goods and services

individuals or businesses concentrate on a single activity or an area of expertise when producing a good or service

real world economies have some characteristics of all three economic systems, but tend to lean toward one of the three

value of one's next best alternative given up when a choice is made

three basic economic questions are answered based on how things have always been done in the past

rivalry among producers or sellers of similar goods and services to win more business

the amount of revenue (price times quantity sold) received by a business minus the costs of operating the business

the extent to which a central authority has control over the production and consumption decisions in an economy.

scarce items used in the production of goods and services in an economy

additional amount of effort, expense, or time one incurs from undertaking one more unit of an action

abilities (physical, knowledge, and skills) that each person brings to the production process

monetary transfer from a government to a business for undertaking a particular desirable action

person takes risks: uses one's own $$ to make prototype of product or buy capital resources required to start-up company

resource/good/service becomes unavailable for a period of time (temporary) due to circumstances affecting market

when the marginal benefit of an action is equal to or greater than the marginal costs of the action

motivates individuals, businesses, and/or governments to undertake an action (positive) or avoid an action (negative)

ability of individuals/businesses in economy to buy, sell, hold property as they wish w/o fear of gov't interference

determines goods/services economy produces b/c businesses will only produce those products consumers are willing to buy

small or incremental change

two people willingly trade 1 item for another b/c value of item received is greater at the time than item traded away

the answers to the three basic economic questions are determined by the interactions of buyers and sellers in the market