Econ Review
Terms
Need- something that is essential for survival, such as food and medical care.
Want- something that we desire but that is not necessary for survival.
Goods- physical objects that someone provides.
Services- actions or activities that one person preforms for another.
Scarcity -the fact that limited amount of goods and services are available to meet unlimited wants.
Economics- the study of how people seek to satisfy their needs and wants by making choices.
Shortage- when consumers want more of a good or service than producers are willing to make available at a particular price.
Entrepreneur- people who decide how to combine resources to create new goods and services.
Factors of Production- the resources used to make all goods and services.
Land- a term used to refer to all natural resources used to produce goods and services.
Labor- the effort people devote to tasks for which they are paid.
Capital- refers to any human made resource that is used to produce other goods and services.
Physical Capital- human made objects used to create other goods and services.
Human Capital- the knowledge and skills a worker gains through education and experience.
Economic system- the structure of methods and principles a society uses to produce and distribute goods and services.
Factor payment- the income that people receive in return for supplying factors of production, land, labor, or capital.
Profit- the amount of money a business receives in excess of its expenses.
Safety net- a set of programs to protect people who face unfavorable economic conditions such as layoffs, injuries, or natural disasters.
Standard of living- the level of economic prosperity.
Innovation- the process of bringing new methods, products, or ideas into use.
Traditional economy-