ECON_Chapter 1: What is Economics?

something like air, food, or shelter that is necessary for survival

an item that we desire but that is not essential to survival. A luxury.

the study of how peoplesatisfy their needs and wants by making choices, the branch of social science that deals with the production and distribution and consumption of goods and services and their management

physical objects such as clothes or shoes. These can be purchased by consumers.

actions or activities that one person performs for another.

limited quantities of resources to meet unlimited wants. We always want more than we have.

a situation in which producers will not or cannot offer goods or services at the current prices.

resources that are used to make all goods and services.

Land, Labor, Capital and Entrepreneurship

all natural resources that are used to produce goods and services.

the effort that people devote to a task for which they are paid.

any human-made resource that is used to create other goods and services.

the human-made objects used to create other goods and services. examples: Tools, buildings and machines.

the knowledge and skills a worker gains through education and experience. The need for human capital increases when technology becomes more sophisticated.

ambitious leader who decide how to combine land, labor, and capital to create and market new goods and services.