AP Microeconomics Unit 1 Economics Basics Vocabulary Review

Economy where individuals answer the three basic questions which emphasizes efficiency .

Money not earned as a result of a choice.

Human resource or mental and physical work.

Economy designed to achieve social goals where government officials answer the three basic economic questions.

Machines and tools used to produce goods and services.

The ability to produce an item in greater quantities or using fewer resources than some other person or country.

Person who takes a risk and produces a good or service by combining the other three resources to make a profit.

Any resource or raw material that comes from nature.

The ability to produce an item with a lower opportunity cost than some other person or country.

Benefit maximization.

Money paid out of one's pocket to pay for a choice.

The satisfaction that comes with consuming more units of a good decreases each time you consume additional units of it.

All combinations of two different types of goods that can be produced with fixed resources.

When people want more of something than there is of it.

The skills and knowledge of labor. More knowledgeable workers are more productive workers.