Chapter 1 and 2 Econ Review

The study of how people choose their limited resources to satisfy their unlimited wants

Any factor that encourages or motivates a person to do something

The resources used to produce goods and services. Resources such as land, labor, and capital

The branch of economics that applies value judgments to data in order to recommend actions

The willingness and ability to take the risks involved in starting and managing business

A way to compare costs of an action with the benefits of that action

The value of the next best alternative that is given up when making a choice. EX: Sleep/Work

The tools, machines, and buildings used to produce goods and services are called

The marginal product of an input gets smaller as one uses more of that input, ceteris paribus.

Work done by someone else for which a consumer, business, or government is willing to pay

A measure of the efficiency with which goods and services are produced 

The condition that results because people have limited resources but unlimited wants is called

System used to manage limited resources for the production, distribution, and consumption

Physical articles that have been produced for sale or use: food, clothing, and cars.

The branch of economics that uses objective analysis to find out how the world works. 

Father of Economics, Invisible hand, supply and demand, free markets

A simple model of an economy that shows all the combinations of two goods that can be produced

The exchange of one benefit or advantage for another that is thought to be better is called a